மன ோன்மணியம் சுந்தர ோர் பல்கலைக்கழகம்

MANONMANIAM SUNDARANAR UNIVERSITY

TIRUNELVELI – 12

ததோலைநிலை ததோடர்கல்வி இயக்கம்

DIRECTORATE OF DISTANCE & CONTINUING EDUCATION

BBA – SECOND YEAR

COMPUTER APPLICATION IN BUSINESS - II

 MSU/2021-22/UG-Colleges/Part-III(B.B.A.)/Semester-IV/Ppr.no.26/Skillbased subject-2

COMPUTER APPLICATION IN BUSINESS - II

PRACTICAL SUBJECT

L T P C
0 0 6 3
COURSE OBJECTIVE:
1. To impart knowledge regarding concepts of Financial Accounting.
2. To make students to make capable to create company, entering accounting vouchers entries
including voucher entries, and also print financial statements.
3. To make students ready with required skill for employability in the job market.
Course Outcomes:

CO1: To help students to work with well- known accounting software i.e. Tally ERP.9.

CO2: Students will learn to create company, enter accounting voucher entries including
advance voucher entries

CO3: Demonstrate an understanding of various predefined inventory vouchers to suit the

various business requirements and flexibility to create unlimited stock items.

CO 4: Demonstrate an understanding of how to maintain a payroll register.

CO5: To prepare Accounting, Payroll, Billing, Sales and Profit Analysis, Auditing
Banking Inventory, Taxation such as GST, VAT, TDS, TCS etc

SOFTWARE: Tally

1. To Create, Alter and Delete a Company owned by you.

2. Do the voucher entry for the transactions

1. Mr. Girish started business with Rs. 1,00,000

 2. Bought furniture for Rs.1,000
3. Goods purchased for Rs.1,500
4. Goods sold for Rs.2,500
5. Goods purchased from Selva & Co for credit worth Rs.7,500
6. Goods sold from Cheenu & Co for credit worth Rs.10,000
3. Alter the following vouchers:

Entry No Date Party Name Alternations

4 7.4.2019 Britannia Industries Order No. SO 118-due on 7.4.2019

6 9.4.2019 Britannia Industries Order No. SO 156-due on 10.4.2019 for

both items

33 3.5.2019 Beauty Care Centre Order No. So 1189-due on 5.5.2019

41 5.5.2019 Beauty Care Centre Order No. SO 2369-due on 15.5.2019

4. Enter the following transactions of the company in Tally and show various reports
January 1 Commenced business with a capital of 80,000

January 3 Purchased machinery 10,000

January 5 Withdrawn from bank for office use 10,000

January 7 Purchased goods from Siama on credit 9,000

January 8 Paid cash to Siama 8,800

Discount received 200

January 11 Sold goods to Kima 5,000

January 16 Received cash from Kima 4,900

Discount allowed 100

January 18 Purchased goods from Siama from cash 6,000

January 20 Paid wages 3,000

January 22 Rent received 5,000

5. Record the following transaction that took place during the April to September 2020
Sl. Transactions Item Quantity amount
No.
1 Purchase from Suresh Reynolds Pen 20 200
2 Sales to Vani Parker Pen 125 2400
3 Sales to Ragu Camel Geometry 100 7500
4 Paid money to Suresh in full settlement 190
for the transaction at Ser.No 1 above
5 Received from Vani and Ragu Rs.9,500 cash in
full settlement for their asset transaction at
Ser.No 2 and 3 above.
6 Paid to Manoj 1000
7 Purchase from Hari Parker Pen 15 1600
8 Purchase from Manoj Reynolds pen 18 360
9 Sales to Priya Pilot Pen 100 15000
10 Purchased furniture 2500
11 Paid insurance premium 1560
12 Sold all the investments 25000
13 Paid
1. Outstanding salaries 2000
2. Electricity charges 1000
3. Tax of the last year 23000
14 Out standing
1. Salaries 5000
2. Provision for Tax 24000
Charge depreciation for the period 1.4.2020 to 30.9.2020 on furniture @ 20% p.a and Machinery
@10% p.a.

1. Create a company as per details given above

2. Create appropriate groups and ledgers
3. Enter the transaction as given selecting appropriate voucher type
4. Trail balance as on 30.9.2020
5. Profit and loss account
6. Balance sheet as on 30.9.2020
7. Cash book

6. From the following Trial Balance, prepare Trading, Profit & Loss A/c and a Balance Sheet as
on 31st March, 2015:

TRAIL BALANCE

Particulars Debit Credit

Machinery 14,000
Furniture 200
Opening stock 2,000
Wages 5,000
Purchases 10,500
Return inward 400
Cash at bank 800
Cash in hand 200
Debtors 2,400
Drawings 1,000
Manufacturing expenses 800
Rent 400
Depreciation 420
Sundry expenses 400
Repairs 50
 Traveling expenses 100
Bad debts 150
Printing and stationary 50
Carriage 130
Capital 10,000
Sales 26,800
Creditors 1,700
Return outward 500
39,000 39,000

The value of closing stock was Rs.11,355

7. Bill of Material Purchase the following items from Rishav Stores vide Ref No./Invoice No.
01/19-20

Sl Particulars Under Rate Qty Amount Godown

No. (Pcs)
1 Perk Raw Materials 7 100 700 Girish Park
2 Dairy Milk Raw Materials 8 100 800 Girish Park
3 Gems Raw Materials 8 100 800 Girish Park
4 Double Shots Raw Materials 8 100 800 Girish Park
5 5Star Raw Materials 6 100 600 Girish Park
After purchase all the items the company has decided to create 50 box finished goods named
“Cadbury Celebration” containing the above items plus cost Rs.2/- per box and labour charges of
Rs.500

Sold 25 boxes of “Cadbury Celebration” @ 15% Profit on cost to Shuvam Stores (Invoice
No.S/001)
8. Create the following stock particulars for Vimal Distribution

Stock Item Stock Group Sub stock Unitsof Opening Unit Price
Measures Quantity
Group

Bourbon Biscuits Cream Biscuits Packet of 10 500 Pcs 10/pkt

Pieces

Horlicks Biscuits Plain Biscuits Packet of 10 1000 pkts 15/pkt

Pieces

Lacto king Chocolates Candy Packet of 50 250 pkts 1/pce

Pieces

Five star Chocolates Bar Box of 100 50 Boxes 10/piece

Pieces

Lays Snacks Potato chips Box of 100 150 pkts 10/pkt

pieces

Sunfest Biscuits Plain biscuits Packet of 10 100 pkts 12/pkt

pieces

Bournvita Biscuits Plain biscuits Packet of 10 800 pkts 20/pkt

pieces

Alphenliebe Chocolates Candy Packet of 50 100 pkts 1/pce

Pieces

Dairy Milk Chocolates Bar Box of 100 250 Boxes 10/piece

Pieces

Bingo Snacks Potato chips Box of 100 300 boxes 15/pkt

packets

9. On 1st October 2017 purchase raw material in cash for manufacture of pressure cooker voice
GST-0111
 Sl. No. Item name Qty Rate GST rate

1 Handel set 100 pcs 50 28%

2 Rubber gasket 100 pcs 3.10 28%

3 Aluminium circle sheet 100 kg 190 18%

4 Safety valve 100 pcs 25 18%

5 Weight set 100 pcs 50 18%

6 Vent tube 100 pcs 53 18%

7 Pressure cooker manual 100 pcs 5 12%

8 Pressure cooker box 100 pcs 11 12%

Pass the necessary entry

10. Generate salary slip from the following particulars

Date Name Pay Heads Amount Dr/Cr

Rs.
30.04.2020 Thamizhselvan Basic pay 30000 Dr
D.A 15000 Dr
H.R.A 2500 Dr
C.C.A 1500 Dr
Gratuity 2000 Cr
P.F 1000 Cr
30.04.2020 Malar Basic pay 25000 Dr
D.A 9000 Dr
H.R.A 1500 Dr
C.C.A 1000 Dr
 Gratuity 1500 Cr
P.F 800 Cr
30.04.2020 Manimaran Basic pay 20000 Dr
D.A 7000 Dr
H.R.A 5000 Dr
C.C.A 3000 Dr
Gratuity 2000 Cr
P.F 3000 Cr
30.04.2020 Palani Basic pay 20000 Dr
D.A 7500 Dr
H.R.A 6000 Dr
C.C.A 3500 Dr
Gratuity 2500 Cr
P.F 4000 Cr
 INDEX

Sl. No. TITLE PAGE NUMBER

1. An Overview of Accounting 1-4

2. Tally - Introduction 5

3. Tally Versions 5

4. Advantages of Tally 6

5. Disadvantages of Tally 8

6. Creating company in Tally 9 – 12

7. Altering company in Tally 12 – 14

8. Deleting company in Tally 14 -15

9. Gateway of Tally 15 – 18

10. Creating Ledger 19 – 21

11. Uses of Feature option & 22

Configuration key

12. Group in Tally 23 – 25

13. Examples in Ledger 26 – 27

14. Voucher Entry in Tally 28 – 34

15. Alteration of Voucher 35

16. Types of Vouchers 35– 38

17. Debit Note & Credit Note 38 – 39

18. Advantages, Disadvantages and 39 – 40
Features of voucher

19. Inventory Info 41-45

20. P&L STATEMENT 45-51

21. Balance Sheet Format 52

22. How to prepare balance sheet in Tally 52-57

23. Payroll 57- 61

24. VAT 61-62

25. TDS 62-63

26. TCS 63-67

27. GST 67-70

28. Cash Book 70 – 75

29. Shortcut keys in Tally 75 -78

30. Examples 79 -146

31. Exercises 147-150

32. Model Questions 151 - 156

 LEARNING MATERIAL PREPARED BY:

Mrs. K. MEENA, MBA, M.PHIL, PGDCA, (PH.D).,

ASSISTANT PROFESSOR,

DEPARTMENT OF BUSINESS ADMINISTRATION,

GOVERNMENT ARTS AND SCIENCE COLLEGE FOR WOMEN,

SATHANKULAM – 628 704.

THOOTHUKUDI DISTRICT

E-MAIL ID: [email protected].

*****
INTRODUCTION:
Tally Solutions has released a new version of its Tally 9 software. It is most popular
software for accounts and inventory management. It offers different feature for maintaining
accounts. Tally 9 is integrated with a lot of advanced features like better data migrating, fast
data speed, payroll management, TDS, TCS, Job costing and point of sale invoicing.
AN OVERVIW OF ACCOUNTING
The main purpose of accounting is to ascertain profit or loss during a specified period,
to show financial condition of the business on a particular date and to have the control over the
firm’s property. In other words, an account is a systematic record of all transaction relating to
a person, an asset, a liability, an expense or an income. Account is also called A/C. such
accounting records are required to be maintained to measure the income of the business,
communicate the information. So that it may be used by manager, owners and other parties.

DOUBLE ENTRY SYSTEM:

Every business transaction has two aspects, i.e., when we received something, we give.
Something else in return. For Example, when we purchased goods for cash, we received goods
and give cash in return, similarly in a credit sale of goods, goods are given to the customer and
customer becomes debtor for the amount of goods sold to him.
This method of writing every transaction in two accounts is known as Double Entry
System of Accounting of the two accounts, one account is given debit while the other account
is given credit with an equal amount. Thus, on any date, the total of all debits must be equal to
the total of all credit because every debit has a corresponding credit.
Rules of Double Entry System/ Golden Rule of Accounting:
There are separate rules of the double entry system in respect of personal, real, and
nominal accounts which are discussed below……
1. Personal account:
These accounts record a business’s dealing with persons or firms. The person receiving
something is given debit and the person giving something is given credit.
In other word personal account recording transaction with person or firm.

Personal Account Rule DEBIT THE RECEIVER

CREDIT THE GIVER

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2. Real account:
These are the accounts of asset entering the business is given debit and assert leaving
the business is given credit. In other word real account is that A/C of property or possession
E.g., Goods A/c, furniture A/C, etc.
For example, when goods are sold for cash, cash account will be giving debit as cash
comes in and Goods account will be credited as goods go out. So, the rule ….
Real Account Rule DEBIT WHAT COMES IN
CREDIT WHAT GOES OUT

3. Nominal/ Fictitious Account:

These account deals with expenses, income, profit and losses.
For example, when rent is paid to the land lord, rent account will be debited as it is an
expense and cash account will be credited as it goes out.
Other example commission A/C, Advertising A/C, Discount A/c, wages A/C.
DEBIT ALL EXPENSES & LOSSES
Nominal Account Rule CREDIT ALL INCOME & GAIN

(Account recording transaction which do not affect particular person but effect business in
general is known as IMPERSONAL A/C’S. it may be either Real or Nominal A/C RULE.)
FEW BASIC TERMS:
• Business transaction:
Any exchange of money or money’s worth as goods and service between two parties is
called a business transaction. It may relate to purchased and sale of goods, receipt and payment
of cash and rending of service by one party to another.
• Debtor:
A debtor is a person who owes money. The amount due from him is called debt. The
amount due from a person as per the books of account is called a book debt. For example, Sold
Goods to Rolex Industry in credit. The Rolex Industry is known as Debtor.
• Creditor:
A person to whom money is owing or payable is called a creditor. For example,
purchased goods from Sam Company in credit basis. The Sam Company is known as Creditors.

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• Capital:
This is the owner’s financial interest or holding in business and is represented by the
value of net assets.
• Goods:
This including all articles, commodities or merchandise in which the business deals.
Thus, cloth would be goods for a dealer in cloth; furniture would be goods for a dealer in
furniture and so on.
• Assets:
Any physical thing or right owned that has money value is an asset. In other words, an
asset is that expenditure which results in acquiring of some property or benefit of a lasting
nature.
• Drawings:
Any amount or goods withdrawn by the owner of a business for personal use is called
drawing.
• Voucher:
Any written document in support of a business transaction is called a voucher.
JOURNAL:
Journal is derived from the French word “JOUR” which means a day. Journal therefore
means a daily record of business transaction. Journal is a book of original entry because
transaction is first written in the journal from which it is posted to the ledger at any convenient
time.
LEDGER:
We know, journal records all business transaction separately and date wise. The
transaction pertaining to a particular person, assets, expense, or income is recorded at different
place in the journal as they occur on different dates. Hence, journal fails to bring the similar
transaction together at one place. Thus, to have a consolidated view of the similar transaction
different accounts are prepare in the ledger. A ledger account may be defined as a summary
statement of all the transaction relating to a person, assert, expense or income which have taken
place during a given period of time and shows their net effect.
TRIAL BALANCE:
The end of the financial year or at any other time, the balance of the all-ledger accounts
are extracted and are written up in a statement known as trial balance and finally totaled up to

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see if the total of debit balances is equal to the total of credit balances. A Trial Balance may
thus be defined as a statement of debit and credit total or balance extracted from the various
A/C in the ledger with a view to test the arithmetical accuracy of the book.
1. To have balances of all the accounts of the ledger.
2. To have proof that the double entry of each transaction has been recorded because
of its agreement.
3. To have material accuracy of preparing the profit and loss account and balance sheet
of the business.
BALANCE SHEET:
A balance sheet is a statement prepared with a view to measure the financial position
of a business on a certain fixes date. The financial position of a concern is indicating by its
assets on a given date and its liabilities on that date. Excess of asserts over liabilities represents
the capital and is indicative of the financial soundness of the company. A balance sheet is also
described as a statement showing the source and application of the capital. It is a statement and
not an account and prepared from real and personal A/C. the left-hand side of the balance sheet
may be viewed as a description of sources from which it currently operated and the right-hand
side as a description of the firm in which that capital is invested on a specified date.
The balance sheet is a statement, which projects the financial position of a business on
a given date. This is one of the backbones of TALLY. At the gateway of Tally, press B to being
up the balance sheet.
PROFIT AND LOSS A/ C:
To display the profit and loss A/c. at gateway of tally press P or select the option profit
and loss A/c. on selection of this option profit and loss A/c is display in the horizontal format
as at last voucher entered. It displays expenses on the left side and income on the right side.
ASSETS:
Assets are property and possession of a business. Stock, Land and Buildings, Cash,
Bills Receivable, are some examples of assets. The classification of assets depends on their
nature the various types of assets are….
• Fixed Assets- land and building. Machinery (Permanently Nature)
• Current Assets- Cash, Stock, Bills Receivable (Operating Cycle of One Year)
• Tangible Assets -Assets can be seen & touched, like furniture
• Intangible Assets- assets which cannot be seen & touched like Goodwill.

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LIABILITIES:
A liability is an amount which a business is legally bound to pay. It is a claim by an
outside on the assets of a business. Liabilities may be classified into following categories.
• Fixed liabilities
• Long term liabilities
• Current liabilities
TALLY - INTRODUCTION
Tally is financial accounting software that helps you to computerize your manual
accounting system. In other words, the tally is accounting software. It is software of keeping
all kind of business transaction. It used POST TRANSATION system. It means, that the
information that is being fed into TALLY as voucher, has been already executed. E.G., in POST
TRANSACTION SYSTEM the payment is first made based on your exiting methods (i.e.)
against a cash bill, against a voucher, etc.) & that information is fed into the program. In other
word POST TANSACTION means after the completion of the transaction.
In tally there are two main accounts namely account only and account with inventory.
Account only deals with account like sale and purchased of goods whereas account with
inventory includes sale and purchase of goods and also the quantity of stock item, which help
us in maintain complete information of particular transaction.
What is Tally. ERP 9?
Tally. ERP 9 is one of the most popular accounting software used in India. It is
complete enterprise software for small & medium enterprises.

Tally. ERP 9 is a perfect business management solution and GST software with an ideal
combination of function, control, and in-built customisability.\

Tally. ERP 9 permits business owners and their associates to interact more in accounts
related discussions and is a complete product that retains its original simplicity yet offers
comprehensive business functionalities such as Accounting, Finance, Inventory, Sales,
Purchase, Point of Sales, Manufacturing, Costing, Job Costing, Payroll and Branch
Management along with compliance capabilities for Excise, TDS, TCS, and now GST too!

TALLY VERSIONS LIST WITH THEIR LAUNCHING YEARS

 In 1990, the very first version Tally 3.0 was launched, which worked only on Microsoft

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 DOS.A similar version as Tally 3.0 with little upgrades was released in 1991, named
as Tally 3.12. Tally 4 was released in 1992, which only operated on MS-DOS.
 In 1994, Tally 4.5 came out, which was used more in financial activities with the help
of Ledgers and Classification vouchers entry.
 In the year 1996, an upgraded version was released as Tally 5, which could not only
run on MS-DOS but on the windows operating system as well. Inventory was added as
a tool in it. It could perform the functions of Inventory Records and Accounting.
 In the same year 1996, Tally 5.4 was released with an update of importing data which
helped in importing data from one operating system to another.
 In 2001, Tally 6.3 was released which was an upgrade to all the previous versions.
Through open data connectivity, it was able to connect to other operating networks.
 In 2005, Tally 7.2 was released with a new tool of Taxes.
 In 2006, Tally 8.1 came out with multiple language support.
 In 2006, Tally 9 was launched which was an upgrade given. It included Payroll and
POS which supported 13 Languages including some foreign languages too.
 In 2009, Tally ERP 9 was released, with high-security features. Tally then became a
work efficient and very useful software of new generation.
 After that, they have just made various releases available with more additional features
and the recent release is Tally Prime which was launched in November 2020.

ADVANTAGES OF TALLY:
1. Tally has saved all paper works, it means the cost of all paper work = Zero = It
means before tally, we had to all work on papers and sometime paper work cost was more than
the benefit of information in small business type organization. But after tally using, most
benefit is gotten by small scale business organizations.
2. In one tally software, you can keep records of unlimited companies. In manual
accounting, it is not possible that a single accountant can keep the record of 20 companies. But,
in my contacts, there are many professional accountants of Mumbai and Delhi who are tracking
all records of more than 20 companies in tally. Billions of Rupees transactions of more than 20
companies and just one tally software. Take idea what is the efficiency and what are the benefits
of tally software.
3. After coming tally, it has made simple system of recording and calculation of all tax
responsibility. Different tax responsibilities like VAT, FBT, Service tax, Excise Mod VAT,
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Custom duty, TDS, Advance tax, etc. can easily calculate and record in tally. Now, companies
are demanding tally professional in first eligibility because they are keeping all records in tally
and without knowledge of tally.
4. Tally provides some exceptional reports which are not possible to make in manual
accounting. In these exceptional reports, you can find negative stock, negative ledger, overdue
receivables, overdue payables, Memorandum vouchers. These reports are very useful, if you
know its benefit. These reports are also used to find out frauds and check by spot internal
auditors. Many accountants did not know that tally can be easy use to track accounting of
foreign business. Because in tally’s configuration makes suitable tally for providing the
information export shipping details, nos. of containers and kinds of packages use in export
option. These in formations are very useful for exporters. For activate these options, you have
to click configuration, then click invoices, delivery notes and orders. Here you can yes different
exporter’s options.
5. There are few accountants who know that when we make the voucher entries of
payroll, at that time we also create cost allocation by only writing yes in voucher entry
configuration in the front of (Allow cost center allocation in payroll vouchers.)
6. One of the best advantages of tally that in tally we can see any report by filtering
rang option. If you know to use excel, you can better understand what is filtering and what is
rang. But here I am telling you that it is just option. Suppose if you see cash flow statement
greater than Rs. 100000 on all items then you can check cash inflow and cash outflow more
than Rs. 100000 each item.
7. With tally accounting software we can synchronize data over multiple locations.
Data synchronize is simple, cost effective and just few minutes we can apply it. With
synchronizing option of tally, we can easy share or collaborates all accounting information
more than one branch of company.
8. With the help of tally, accountants can generate all type of VAT through ereturn files.
9. Tally can be operated in 13 languages, if you are businessman and prefer to use tally
in your local language, tally is providing support to record your transactions in your own
language. You can also print and view reports another language also.
Life time benefits = Speed + Advance + Safe + Universal Accounting software.

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DISADVANTAGES OF TALLY:
`1. Tally is not as easy as Excel or MS Word of Microsoft Company. Because, Excel
and MS Word can learn by self. But even senior accountants, if they do not know how to
operate, they can also mistake in maintaining of accounts in tally.
2. There is no improvement in old version of tally. Tally Company is launching new
version one by one from tally 3.0 to tally erp9. It is one of most disadvantages of tally that the
expert in old version of tally cannot get improvement in same version. Suppose I am expert in
tally 7.2 and tally launch new version tally 8.1, 9 and tally 9erp. But tally Co. is not care for
improving tally 7.2. But now after migration facility from tally 7.2 to tally erp9 is good step of
Tally Company for removing this advantage.
3. Tally making and maintain system of budgeting is no so advance. There is no
provision of capital budgeting in tally 9 with different methods of capital budgeting.
4. Tally does not provide one button of default setting of this software, suppose a new
customer purchased tally for maintaining accounts on it and he has changed some setting of
features and configuration after this, if his accountant found something wrong in tally, there is
no one button to correct it because without deleting ledger and voucher , you can return to
default setting of feature menu .
5. Tally support system is no so effective. There is still need to improve to the support
system of tally. So that training of this software becomes simple.

How to use Tally. ERP 9?

Tally is nothing but accounting in digital format. Maintaining accounts in manual
books, we write accounting entries as debit and credit. In Tally, we create entries the same way.
So how do we do it Tally then?

The entire thing could be pictured as the installation of any machinery in the workplace.

Process 1: Installation: (Buying a machine, we first install it for using it)

Tally software can be purchased and downloaded from the Tally website. We can trial
version if we are not sure if we want to use it yet. Tally 9 is for Windows only. We can also
use Tally in Educational Mode, which allows you to learn how to use the software without
having to purchase a license. Some features are restricted in this mode.

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Process 2: Navigation: (After installation is complete, we use its hardware supports or
software supports to use the machine)
Tally. ERP 9 is designed to be navigated by using the keyboard. While we can click
any option we want, everything in Tally has a keyboard shortcut. The Shortcut as we say is
usually the key displayed next to each available option. Learning how to get around with the
keyboard will increase efficiency.

Process 3: Create a Company: (After we get some idea about the machine, we set the
program for it to work)

To use Tally, we will first need to create a company in the program.

HOW TO OPEN TALLY?

Double click on Tally icon on Desktop or Click on start then programs then tally and
again tally. When you open tally, it may display gateway of tally screen or company info
screen. But you are required company info screen to create company at the beginning. You can
move to company info screen from another screen by pressing ALT + F3 key
CREATIING COMPANY IN TALLY ERP9

You can open Tally.ERP9 software by double clicking on Tally.ERP9 icon. The first

step is how to create a company, and without creating a company you will not move further to

create masters and recording of business transactions etc.

You can easily create a company in Tally.ERP9 by using the below steps.

Step 1: Gateway of Tally –> ALT+F3 –> Click on Create Company

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 Figure 1
Step 2: Click on create company, once you click on create company then the below screen
will appear.

Figure 2
Step 3: You have to go through the above 2 steps and fill the information related to your
company like, address of company, contact details and other information.
Name: Enter company name in this field like, ABC Company
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 Address: Enter company address
Country: Select country
State: Enter State like, Telangana or Karnataka
Pin Code: Enter pin code
Telephone: Enter telephone number
Mobile No: Enter mobile number
Fax No: Enter Fax number
Email: Enter your company official communication mail id
Website: Enter your company website address
Financial year begins from: Enter financial year begins from like, 01.04.2023
Books beginning from: Most of the cases financial year begins date from and books
beginning date from are same but when you have created a company in Tally.ERP9 on
01.07.2023 in this case financial year begins from 01.04.2023 and books beginning date from
01.07.2023.
Security Control: This is very useful option in Tally by activating this option you can
avoid unauthorized access of company data.
Use security control: Yes / No, If Yes, You have to remember username and
password.
Base Currency symbol: ₹ Currency symbol of the country
Formal Name: INR is formal name of the currency
Is Symbol Suffixed to Amounts: If required you can enable this option, the
purpose of this option is whether currency symbol is required prior to amount like, ₹650
Add space between amount and symbol: Yes, this is like space between amount
and currency symbol ₹ 650
Show Amount in Millions: If you enable this option then it will display amount in
reports like, balance sheet and other reports in Millions example, Rs.1000000 is equal to 1
million.
Number of decimal places: Generally, will use 2 decimals for paisa purpose in
India like, Rs.58.65.
Word representing amount after decimal: It is by default set as paisa in Tally
and not require any changes.
No. of decimal places for amount in words: This is for decimal places for

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amount in words.

Figure 3
Step 4: Enter ed company details press Enter Key –> Accept –> Yes
Now our company will be created

Figure 4

ALTERING/ DELETING COMPANY IN TALLY

In this section, we will learn how to alter and delete company in Tally ERP 9 software.
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How to Alter Company?

Companies will alter or edit their information when they have changed company
address or contact number or email and other any information.

After the company creation in Tally, the given information of the company can alter/
modify/ change as per requirement. Use the following steps to alter company in Tally:

Step 1: Gateway of Tally → Press Alt+F3 → Alter

Figure 5

Step 2: Under list of companies, choose the company name and click on name of company to
alter.

13
 Figure 6
Step 3: On company alteration screen, add and modify the required details and use Ctrl+ A
options to save the details. Here we have added contact details of phone number.

Figure 7

14
HOW TO DELETE COMPANY IN TALLY ERP 9?
If you delete company in Tally, it removes the complete information of company from
Hard drive, all the files and directories that are associated with company will be deleted
permanently and it cannot be reversed.
To delete company in Tally ERP 9: Gateway of Tally > Alt+F3 > Alter > Alt+D.
Step 1: After using Alt+F3 keys, the company information screen displays on the screen.
Here the delete option will be not available. Click on alter option.

Figure 8

Step 2: Now select company and click Alt+D and click on YES option to delete the company
in Tally ERP 9.

Figure 9
15
GATEWAY OF TALLY:
The gateway of Tally Screen control center of tally. Gateway of tally is that menu which
actually deals with the accounting of transactions, creating ledger, generating statement like
balance sheet and profit and loss account, displaying ledgers, vouchers etc. after selecting the
required company ‘gateway of tally’ menu is displayed on the screen.

This screen is the Gateway of Tally. The various components of Gateway of

Tally are described in the table below:

I. Horizontal Button Bar: Option to print, e-mail, import and upload data is
available here. This bar also has options to help you to access the help manual,
control centre and support centre.
II. Vertical Button Bar: All the button options are displayed here. The buttons
vary from screen to screen.

III. Main Area (Ctrl+M): Main area is divided into two parts:

1. Left-hand side: Information on the date and list of companies loaded are displayed
here.

2. Right-hand side: The Gateway of Tally menu is displayed here.

Figure 10

IV. Info. Panel: The info. panel is divided into five sections:
16
 1. Product:

Displays the Tally logo. You can click the logo to visit the website.

2. Versions and Updates:

Displays details about the current and latest releases and the TDL information.
Press Ctrl+Alt+T to display the version and updates information.

3. License and Subscription:

Displays information related to the product license such as Site ID, Account
ID, Serial Number and so on. Press Ctrl+Alt+L to display the license and subscription
information.

4. Configuration:

Displays statutory details, configuration details such as proxy configuration,

data configuration and so on. Press Ctrl+Alt+F to display the configuration
information.

5. Calculator:

Mathematical calculation can be done here. Press Ctrl+N to activate the

calculator panel.

V. Task Bar:
System date and time are displayed here.

BUTTON BAR

Top Button Bar Options:

Buttons Shortcut Functionality

Key

Print Alt + P Navigate to Print menu

Export Alt + E
These buttons are disabled in
E-Mail Alt + M
the Gateway of Tally screen.
Upload Alt + O

17
 Language Alt + G To change the language

Keyboard Alt + K To change the keyboard language

Control Centre Ctrl + K Login to Control Centre

Support Centre Ctrl + H To post queries, if any, relating to the

product.

Right-Side Button Bar Options:

BUTTONS SHORTCUT KEY FUNCTIONALITY

Select Cmp F1 To select a company

Shut Cmp Alt + F1 To shut or close the company

Date F2 To change the current date

Period Alt + F2 To change the period

To select a different company which is

Company F3 already loaded. (If a company is loaded,
this button is disabled)

Company Info Alt + F3 To access the Company Info. Menu

To connect companies to Tally.NET

Connect F4
Server

To disconnect companies from

Disconnect Alt + F4
Tally.NET Server

To access the Company Features menu

Features F11
for a company

Configure F12 To access configuration settings

18
CREATING LEDGER
Ledger accounts represent the assorted, summarized and balanced transaction of similar
nature.
For example: the ledger account conveyance represents the set of transactions related
to conveyance expenses and their summarized net figure. All accounting transactions are linked
to ledger account.
Create Ledger
• Go to account info from Gateway of Tally
• Choose Ledger
• Choose Create from Single Ledger.
1. Type Ledger Name
2. Choose Account Type on under option.
3. Set other details if required.
4. Set Opening balance if any.
• Accept Data
Alter Ledger:
• When you need to change or correct the ledger you have created we use Alter.
• Go to Account Info.
• Go to Ledger
• Select Alter from Single Ledger
• Choose the Ledger you want to modify
• Change the required information of the Ledger
• Accept Data.
Display Ledger:
• Using Display Ledger, you can view the list of ledgers you have created.
Single ledger:
• Step 1: To create single ledger, select create under single ledger and press enter
• Step 2: In ledger creation dialogue box, type Hasan’s capital in the Name field and
press enter key twice to skip the field Alias and go to the next field.
• Step 3: In the field under, type the alphabet ‘C’ and select capital account from the
list of groups displayed on the right side of the screen.
• Step 4: Fill other information as par the condition and if you want.

19
Multiple ledgers:
• Step 1: In ledgers menu, to create multiple ledgers press R.
• Step 2: In multi ledger creation dialogue box, in this the field under group, type the
alphabet ‘C’ and select current liabilities from the list of groups displayed on the right
side of the screen.
• Step 3: In the field name of ledger, type the account name ‘drawing’. And press enter
key.
NOTE: Ledger and the Group appear in the filed under.

LEDGER GROUP
Purchase Purchase Account
Purchase Return Purchase Account
Fright Charges Direct Expenses
Carriage Inwards Direct Expenses
Octroi Direct Expenses
Wages Direct Expenses
Sales Sales Account
Paid
Salary Indirect Expenses
Rent Paid Indirect Expenses
Postage and Telegrams Indirect Expenses
Telephone Charges Indirect Expenses
Rates And Taxes Indirect Expenses
Insurance Indirect Expenses
Audit Fees Indirect Expenses
Interest on Loans Paid Indirect Expenses
Printing and Stationery Indirect Expenses
General Expenses Indirect Expenses
Discount Allowed Indirect Expenses
Carriage Outwards or Sales Indirect Expenses
Traveling Expenses Indirect Expenses

20
Bad Debts Indirect Expenses
Advertisement Indirect Expenses
Received
Interest on Investment Received Indirect Income
Interest on Deposit Received Indirect Income
Interest on Loans Received Indirect Income
Commission Received Indirect Income
Discount Received Indirect Income
Rent Received Indirect Income
Dividend Received Indirect Income
Loan From Others Loan Liabilities
Bank Loan Loan Liabilities
Bank Overdraft Bank OD
Bills Payable Current Liabilities
Sundry Creditors Sundry Creditors
Income Received in Advance Current Liabilities
Other Liabilities Current Liabilities
Capital Capital Account
Drawings Capital Account
Cash in Hand Cash In Hand
Cash at Bank Bank Account
Fixed Deposit at Bank Deposit
Investments Investments
Bills Receivable Current Asset
Sundry Debtors Sundry Debtors
Furniture Fixed Asset
Motor Vehicles Fixed Asset
Plant and Machinery Fixed Asset
Land and Building Fixed Asset
Patents Fixed Asset
Goodwill Fixed Asset

21
USES OF FEATURE OPTIONS (F11)
Features is used to change the options related to the selected company only.
 For this F11 button in button panel is a short cut.
 Using this menu, feature of the company is changed that means enables or disables.
 Various features are available like whether company wants invoicing or not, whether
company required multiple currencies or cheque printing or not, etc.
USES OF CONFIGURATION OF COMPANY (F12)
To configure company, click on F12 button from the button panel. It shows the
following screen in gateway of tally:
Configuration
General
Numeric symbol
Accts/inv. Info
Voucher entry
Invoice/order entry
Printing
Quit
1. Configuration changes may affect all the active companies.
2. Configuration has different options like general, numeric symbols, accts/inv. Info,
voucher entry, invoice, order entry, printing, etc.
3. General options are used to change information like country detail, date format or graphs
in monthly report, etc.
4. Numeric symbol option is used to change format of the numbers.
5. Accts/inv info option is used to check the default settings. In this option, if user sets
allow alias for the name, then only it asks the alias otherwise it doesn’t ask any alias for the
name.
6. Voucher entry set the features of the vouchers, such as cost vouchers details, bill wise
details, ledger current balance, etc.
7. Invoice/order entry sets the features of the invoices and purchase, sales order entry.
8. Printing options is used for printing Vouchers, Invoices, Financial Statements, etc.
9. Quit option is used to quit from the configuration menu and go to the previous menu.

22
GROUP IN TALLY

 In tally, all accounts entries can be grouped or sub grouped according to the need of
users.
 Group means the type of the account. Functions of each group are fixed.
 Tally provides facility to user to create own group. Also, it provides 28 predefined
groups.
 Out of these 28 groups, 15 are primary groups and 13 are sub groups.
Following is the list of groups that affects the Balance sheet.
1. CAPITAL ACCOUNT:
Handle investments or owner’s account. It has a subgroup.
(A) Reserves and surplus:
All reserves accounts like general reserves, capital reserves et
2. CURRENT ASSETS:
These assets are divided in 6 sub-groups as follows
i. Bank accounts:
Holds bank transactions that means current accounts, savings accounts, etc.
ii. Cash in hand:
All cash track in ledger.
iii. Deposits (assets):
Fixed deposits, security deposits made by company.
iv. Loan and Advances (assets):
If the company gives any loan or advanced to other.
v. Stock in hand:
Keep records of opening or closing stock of the material.
vi. Sundry debtors:
This maintains the list of all companies or persons to whom company gives
material on credit.
3. CURRENT LIABILITIES:
It keeps track of outstanding liabilities or statutory liabilities.
i. Duties and Taxes:
All taxes and duties that are paid by company like Trade duties, Excise, Local
Sales Tax etc., are recorded under duties and taxes.
23
 ii. Provisions:
It maintains records of all financial arrangement for possible future
requirements.
iii. Sundry Creditors:
Company purchase material or any other things on credit. Then the list of all
companies or persons is under sundry creditors to whom company purchased material.
4. FIXED ASSETS:
Handle accounts of all assets like machinery, buildings, etc.
5. INVESTMENTS:
It keeps records of overall investment like shares, Govt. securities, Deposits etc.
6. LOANS (LIABILITY):
It keeps an account of the loans taken by company and has following three subgroups:
i. Bank OD accounts:
Keep all overdraft accounts.
ii. Secured Loans:
Keep track of loans taken by the company securities against the fixed assets.
iii. Unsecured Loans:
Unconditional loan obtained from Partners/ Directors or other parties.
7. SUSPENSE ACCOUNT:
This account is used to enter the transactions whose details are to be finalized.
8. BRANCH / DIVISIONS:
All the names of branches, divisions and subsidiaries of the company.
9. MISCELLANEOUS EXPENSES:
Under this group all expenses are entered.
Following group affect Manufacturing, Trading and Profit and loss accounts:
10. PURCHASE ACCOUNT:
It is used to maintain records of all purchase account.
11. SALES ACCOUNT:
It keeps record of all sales.
12. DIRECT INCOME:
This group is used for entering all direct incomes like sales of goods.
13. INDIRECT INCOME:

24
 This group maintains the all incomes other than sales. That means it keeps record of all
incomes like rent received, interest received etc.
14. DIRECT EXPENSES:
This group is used for recording all direct expenses means the purchase of raw material,
or wages of workers.
15. INDIRECT EXPENSES:
This group is used to maintain the records of all expenses other than direct expense. All
salary paid, rent paid, advertisement charges are under indirect expenses.
HOW TO CREATE SINGLE AND MULTIPLE GROUPS?

1. Group is the type of account. Group decides how transactions take place in accounting.
2. Tally provides 28 predefined group. But if user wants to create any other group, then use
create group option.
3. These new group is a sub group of existing groups.
4. If user wants to create a new subgroup under different groups, then follow the following
steps:
i. From Gateway of Tally, select Account info.
ii. Then select Group option, as user wants to create group.
iii. If user wants to create single group at a time, then select create option from
single group.
iv. Now tally shows data entry screen for group as follows.
Group creation
Name
(alias)
Under:
Group behaves like a sub – ledger?
No.
Name: Enter the name of a group that user want to create.
Under: Select the existing primary group name.
v. If user wants to create subgroups under more than one parent group or under
one parent group then user must select create option from Multiple groups.
vi. Then multiple group creation screen will appear.
a. To create subgroup under one parent group, select that group in the option under group.
25
b. To create subgroups under more than one parent group, select all items in the option under
group.
EXAMPLE: 1
STATE GROUPS FOR LEDGERS
1. Ashok starts business with Rs. 100000/-
2. Purchase machinery for Rs. 50000/ and furniture for Rs. 10000
3. Paid amount for rent Rs. 1000/
4. Deposits Rs. 10000/- in Bank
5. Purchase of goods for Rs. 20000/ from Mr. Ram on credit.
6. Sold goods to Mr. Rakesh for Rs. 10000/
7. Rs. 5000/ withdraws from bank for personal use.
8. Withdraws Rs. 1000/ for office use.
9. Received cash from Mr. Rakesh.
10. Paid to Mr. Ram.
SOLUTION:

Sl. No. LEDGER GROUP

1. Mr. Ashok a/c Capital a/c
2. Furniture a/c Fixed asset
3. Machinery a/c Fixed asset
4. Rent a/c Indirect expenses
5. Bank a/c Bank a/c
6. Purchase a/c Purchase a/c
7. Sales a/c Sales a/c
8. Mr. Ram a/c Sundry creditor
9. Mr. Rakesh a/c Sundry debtor
10. Drawing a/c Capital a/c

EXAMPLE: 2
STATE GROUPS FOR LEDGERS
1. Mr. Ram starts business with Rs. 200000/- and deposited into bank Rs. 40,000.
2. Paid for office building Rs. 50000/ and furniture for Rs. 10000/-
3. Purchase raw material of Rs. 10000 on credit from Mr. Avinash.
26
4. Paid Wages Rs. 2000
5. Paid salary Rs. 10000
6. Return money to Mr. Avinash in settlement of Rs. 9500.
7. Sold goods to Mr. Shekar Rs. 15000/-
8. Received interest on bank amount Rs. 500.
9. Received from Mr. Shekar after discount of Rs. 500.
10. Sold old newspaper Rs. 450/-
11. Sold old furniture Rs. 4000/-
SOLUTION:

Sl. No. LEDGER GROUP

1. Mr. Ram a/c Capital a/c
2. Bank a/c Bank a/c
3. Furniture a/c Fixed assets
4. Building a/c Fixed assets
5. Purchase a/c Purchase a/c
6. Mr. Avinash a/c Sundry creditor
7. Wages a/c Direct expenses
8. Salary a/c Indirect expenses
9. Discount a/c Indirect expenses
10. Sales a/c Sales a/c
11. Mr. Shekar Sundry debtor
12. Interest a/c Indirect expenses
13. Old newspapers Indirect income

Main Differences between Group and ledger in tally

The difference between Group and Ledger is as follows:
 Tally provides us 34 automatic groups for ledger creation. But tally provides only 2
ledger account in tally software and its names are cash are profit and loss account.
 Group is head category or it is base of ledger creation. We can simply take an example
from you day to day field. Suppose you have taken commerce subject and it can also
divide into management theory, accounts, business math’s and economics. So, Main
27
 group is commerce and all other are called ledger accounts but under this commerce
group. Same will apply in accounting in tally, we can create several groups under single
ledger
 We generally neither create extra groups nor change them which is provided by tally
software but we must create different ledger according to the need of recording of
different vouchers in tally
 If we have changed group from one category to another, all ledger will automatically
change by this. So be serious for making any change in group.
 Group is most helpful to make final account according the nature of organization, but
ledger creation is not helpful for any redesigning of final account in tally 9.
JOURNAL VOUCHER IN TALLY - EXAMPLES, AND HOW TO ENTER JOURNAL
VOUCHERS IN TALLY
A Journal voucher in Tally is a crucial voucher in Tally ERP 9 that involves making
adjustment entries, entries regarding fixed assets and credit purchases or sales. You need to
press the shortcut key "F7" from the accounting vouchers to use Journal Vouchers. There are
innumerable examples of journal vouchers which we will be presenting below. By the end of
this article, you will have complete knowledge on how to enter Journal vouchers in tally with
ease.
WHAT IS A JOURNAL VOUCHER IN TALLY?
Every transaction requires a piece of documentary evidence like a Journal
voucher. Journal Voucher in Tally ERP 9 is used to record transactions other than cash and
bank. Transactions related to depreciation, provisions, purchase and sale of fixed assets on
credit, write-off balances, adjustment entries are recorded in Journal Voucher. It is the most
important voucher in accounting vouchers.
You can easily trace these vouchers in any accounting system. Auditors generally use
Journal Vouchers during an audit as a part of Audit Procedures. These transactions are of
routine nature.
Purpose of Journal Vouchers
Journal vouchers are prepared to serve multi-fold purposes as described below:
 To record non-cash transactions in the books of accounts
Non-cash transactions are those transactions that do not involve a cash payment. For
example- depreciation, loss or gain on fixed assets, provision for discount expenses, asset

28
write-downs and deferred income taxes.
 To rectify any business transaction which was wrongly recorded in the books of
accounts.
There may be situations when the business transactions are wrongfully recorded in the
books of accounts. It may be incorrect debit or credit of accounts. Journal Vouchers helps in a
reversal of the first entry using a journal entry in Tally ERP 9.
 To record the transactions not recorded by other accounting vouchers in Tally
ERP 9.
All accounting vouchers record transactions of specific nature or type. Some are described
as follows:
 The receipt voucher records all the money received.
 Payment voucher records all the money paid.
 Contra voucher records the transactions involving cash and bank.
 Sales voucher records the transactions involving the sale of goods or services.
 Purchase voucher records the transactions involving the purchase of goods or services.
 Journal voucher records the transaction entries not recorded by other accounting
vouchers.
TYPES OF JOURNAL VOUCHERS
Journal Vouchers are divided into different types:
Depreciation Voucher:
This voucher records the depreciation expense on fixed assets for the year. Generally,
we use a payment voucher to book an expense. In this case, we use Journal Voucher as
depreciation is a non-cash expense. Non-cash expenses are not booked through payment
vouchers.
Prepaid Voucher:
Prepaid Voucher records all the pre-paid expenses paid during the year. For example-
payment of salary for 6 months in advance during the financial year 2020-2021.
Fixed Assets Voucher:
This voucher records the purchase of fixed assets during the year. Note that fixed assets
purchased for cash are recorded in a payment voucher. On the other hand, credit purchases or
sales of fixed assets are booked through a journal voucher.
Adjustment Vouchers:

29
 These vouchers record all the closing entries for the year. The main purpose of the
adjustment entries is to communicate an accurate and fair view of the company’s finances.
Transfer Voucher:
These vouchers involve the shifting of balances of one account to another account.
Also, you can record the transfer of materials from one warehouse to another.
Rectification Voucher:
These vouchers record the rectification entries of the tally. Sometimes, wrong
transactions are recorded due to a wrong journal entry in tally or journal voucher. All the
mistakes are corrected using rectification entries in the journal voucher.
Provision Voucher:
This voucher involves the booking of the provision of expenses on an estimation basis.
Provisions are made for future contingent liability. You can book your losses in advance to
prepare for future liability.
Accrual Voucher:
This voucher records the actual expenses or income. Actual means the transactions have
occurred but were not paid or received during an accounting year.
Examples of Journal Voucher in Tally ERP 9
There are various examples of recording Journal Vouchers in Tally ERP 9. Some of
them are described as follows:
1. Outstanding expenses
Outstanding expenses are those expenses that are due but not paid over the year. It is a
liability. For example- Outstanding rent, outstanding salary, outstanding wages and
outstanding subscription etc. Let's say wages for the months from January to March are paid
during May of the new Financial Year. As per the accrual concept, the expense should be
recorded from January to March itself to show the accurate figure of a business.
You can record the Journal entry at the end of March as:
Debit Salary Account XXX
Credit Outstanding Salary Account XXX
2. Prepaid Expenses
Prepaid expenses are the expenses paid in advance. These expenses haven't occurred in
this financial year yet. As per accrual basis, the expenses should be booked in the year to which
it pertains. But as per cash basis, we will record this transaction in the year of cash outflow.

30
We will record these expenses as an asset in this financial year to reach an accurate net profit.
Let's say I have paid my house rent for the next financial year in this financial year only.
The Journal Entry for the same will be:
Debit Prepaid Rent Account XXX
Credit Rent Account XXX
3. Accrued Income/ Expense
Accrued Income is an income that is earned but not received. It is a current asset for the
organization. For example- accrued interest receivable, accrued rent, accrued salary etc.
Journal entry for accrued income:
Debit Accrued Income Account XXX
Credit Profit and Loss Account XXX
Accrued Expense is an expense that is recognized in the books of accounts before it is
paid. It is a current liability for the organization. For example- bonus, salary payable, unused
sick leaves, accrued interest payable etc.
Journal Entry for Accrued Expense:
Debit Profit and Loss Account XXX
Credit Accrued Expense Account XXX
4. Credit Purchases or Sales
Credit purchases are made when fixed assets or materials are bought on credit. For
example- Mohan bought Plant and Machinery from Sohan on credit for Rupees 10 lakhs.
The journal entry in tally for the transaction will be:
Debit Plant and Machinery Account: 10,00,000
Credit Sohan Account: 10,00,000
Credit sales are made when fixed assets or materials are sold on credit. For example-
Rashi sold Land and Building to Komal on credit for Rupees 15 lakhs.
The tally journal entries for the transaction:
Debit Komal Account: 15,00,000
Credit Land and Building Account: 15,00,000
5. Transfer Entries
These Journal Voucher entries in tally are made when you require to transfer funds
between different accounts. You can say it as writing off the accounts too. For example- A
company has a debtor balance of Rupees 20,000 and a creditor balance of Rupees 25,000. I can

31
write off the debtors from the creditors. It means that my debtors worth Rupees 20,000 can
directly pay my creditors worth 20,000 and the values in the books of accounts will be:
Debtors: 0
Creditors: 5000
The journal entry for the transaction will be:
Debit Creditors Account: 20,000
Credit Debtors Account: 20,000
Difference between a Journal Voucher and Journal Entry
Although these two important terms, “Journal voucher” and “Journal Entry,” are used
interchangeably, but they are different from each other.
The following are key differences found between these two:
 The Journal Voucher is the commencement of any financial transaction & the Journal
Entry is the effect of that financial transaction recorded in the books of accounts.
 Journal entries are recorded in the books of accounts, i.e., Journal while on the other
hand, Journal Vouchers are the evidence of recorded documents for the journal entry.
 Journal entries can be of two types- Simple and compound. Simple Journal entries are
those entries where debit or credit of only one account takes place. On the other hand,
compound entries are those entries where debit or credit of more than one account takes
place. However, there is no such difference found in journal vouchers. You can draw
any number of the journal from a single Journal voucher.
 Journal entry in tally is posted to appropriate/ suitable ledgers. Whereas the Journal
Vouchers are recorded into the system
How to pass Journal Entries in Tally?
Passing Journal Entries in Tally through Journal Vouchers is very simple. If one knows
the basic accounting rules, they can post the accounting entries in Tally ERP 9 without serious
effort. However, most people have a confusion regarding the basic rules of accounting. You
need to clear some concepts regarding:
 The golden rules of accounting
 What is an expense or income?
 What comes under fixed assets?
 Sales or purchase of goods or services
 GST related entries

32
 Steps to enter Journal Voucher in Tally ERP 9
Journal entries in Tally are posted through journal vouchers. Journal Vouchers are
easily accessible by pressing the shortcut key "F7," or you can move your cursor to the Journal
Voucher to access the same.
There are some broad steps to enter the journal entries in Tally ERP 9 as described
below:
Step 1: Open your Tally ERP 9. If you are working under the educational mode, click
on the same. If you are a professional and have a license, open it under licensing operations.
Step 2: After opening the software, the screen will display the Gateway of Tally. There
are significant heads like Masters, Transactions, Utilities, Reports, Display and Quit. Go to the
transaction vouchers and select the accounting vouchers.
Step 3: Under the Accounting Vouchers, different vouchrs are displaying on the screen
like:
I. Inventory Voucher
II. Order Voucher
III. Contra Voucher
IV. Payment Voucher
V. Receipt Voucher
VI. Journal Voucher
VII. Sales Voucher
VIII. Purchase Voucher
IX. Credit Note
X. Debit Note
Among these vouchers, select the Journal Voucher or press "F7" on the right side of the
screen.
Step 4: Enter the ledger to be debited or credited after By /Dr under the particulars
column. One can enter multiple debit or credit entries one by one only if required. There may
be some situations where you need to debit or credit various ledger accounts. Before

debiting/crediting, you need to create an appropriate ledger by pressing alt+c for the same.
Step 5: If you are debiting, use the option By/Dr or crediting the accounts, use To/Cr.
Using these options, enter the respective amount.

33
 Step 6: After posting the entry and the amount, you will see the narration field on the
screen's bottom-left corner. Enter the narration (details of the transactions) and press enter to
save the final Journal Voucher.
In this way, you can add multiple Journal Vouchers in Tally ERP 9 for the respective
transactions.
VOUCHER ENTRY

Account Dr Cr

Personal Account The Receiver The Giver

Real Account What comes in What goes out

Nominal Account All expenses and losses All income or gains.

 Associated ledgers and their Dr./cr. Side.

 Voucher date

 Dr. /Cr. Amounts should be equal.

 Types of vouchers (i.e., Receipt, payment, contra, sales, purchase, journal etc)

Settings for Voucher Entry

 Press f12 after entering Accounting Voucher

 Set “Use Single entry mode for Pymt/Rcpt/contra”. -- No.

 Set “Use Cr. /Dr. instead of To/By during entry”. – Yes

 Press Enter continuously until you accept data.

 Now processed for voucher entry.

34
VOUCHER ALTERATION AND DELETION

After pressing all entries if you want to check all passed entries for correction or
deletion of voucher you may perform these in voucher alteration mode, in following 2 ways

• From voucher screen

To get any voucher of current date in Alteration mode

• Press page up key to get previous voucher.

• Press page down key to get next voucher.

To get a voucher of any other date

Step 1: In Gateway of Tally press D for Display Menu.

Step 2: In Display Menu press Day Book or Statement of Accounts.

Step 3: In statement of account press S for statistics.

Step 4: For Alteration mode press enter key till you get alteration screen, then make a
desire change in it. Press Ctrl+A to SAVE changes you made or Ctrl+Q for quit from
the screen without any changes.

Step5: For deletion of voucher at alteration mode, press Alt+D, at DELETE? Press
YES or NO to confirm deletion.

TYPES OF VOUCHERS

1. Receipt (F6):

This voucher is made when we receipt cash from any person, company or parties. Cash
received on sales of fixed assets and scrap items are also entered through this voucher.

35
 Cash received on sales of Business goods/trading items are not entered through this
voucher. They are entered via sales voucher.

This voucher is entered by pressing F6 key.

2. PAYMENT (F5):

This voucher is made when we pay cash or cheque to any person, company or parties. Fixed
assets purchased on cash also entered through this voucher but purchase of Business goods are
not entered through this voucher. They are entered via purchase voucher.

Dr. Cr.

 All Creditors

 Fixed assets. Cash/ Bank

 Payment of Interest/salary/commission/bills payable etc.

3. CONTRA (F4):

This voucher is made when we deposit cash into bank or withdraw cash from bank or
transfer cash from one bank to another bank.

Dr. (+) Cr. (-)

Deposit Bank Cash

Withdraw Cash Bank

Transfer Bank 1 to where cash deposited) Bank 2 (From where cash Transferred)

36
4. PURCHASE (F9):

Purchase voucher is made when we purchase business goods or trading items on cash
or credit.

Purchase of fixed assets and official goods are not entered through this voucher.

When you entered this voucher, you also need to mention Stock Item name, Qty. of
Stock item and Rate of the item.

Dr Cr.

Purchase a/c Cash/Bank

Sundry creditors or suppliers

• Purchased goods from Hasan on credit basis RS.8000/-

Purchased A/C…………………Dr

To Hasan A/C

5. SALES A/C (F8):

This voucher is made when we sale business goods or trading items on cash or credit.
Sale of fixed assets or scrap items are not entered through this voucher.

Dr Cr.

Cash/Bank Sales a/c

Sundry Debtors or Customers (mention Name of Item, Qty and Rate.)

• Goods sale to Ahmed on credit Rs. 5000/-

Ahmed A/C…………………. Dr
37
 To sale A/C

6. JOURNAL (F7):
This voucher is made to adjust two accounts. i.e., Depreciation calculation, Fixed assets
sale or purchase on credit etc.
• Depreciation on furniture
Depreciation A/C……………Dr
To furniture A/C
• Outstanding salary
Outstanding salary A/C……………Dr
To salary A/C
SETTINGS FOR THE DR. NOTE AND CR. NOTE.
1. Press F11 Key for setting
2. Choose Accounting Features
3. Set Yes on “Use Debit/Credit Notes”
4. Press Enter until you accept data.
Debit Note (Ctrl+F9):
This voucher is made when we return purchased goods or trading items to the suppliers
or creditors.

Dr. Cr.

Cash/Bank. Purchase Return A/c

Creditors/Suppliers (made under Purchase a/c) Apply Returned stock item name, qty and rate

Credit Note (Ctrl+F8):

This voucher is made when our customer returns sold goods /trading items to us.

38
 Dr. Cr.

Sales Return A/c Cash/ Bank

Under sales a/c
Apply Returned Stock item name, qty and rate Customers /Debtors a/c

Advantages of Vouchers

 All business transactions are kept in the chronological order of their occurrence.
 It helps in the rectification of errors.
 It helps track the non-cash expenses easily.
 It helps close the books of accounts at the end of the year.
 It provides smooth backup for a reversal of entries.
 It helps comply with significant financial reporting standards prescribed by the relevant
authority.

Disadvantages of Vouchers

 The most significant disadvantage is that it is incapable of giving all the information in
case of large transactions.
 The voucher itself does not help keep track of all the financial transactions. There is a
chance that a few transactions are missed out on being recorded. Here is where the role
of the auditor comes into play.
 There is no actual cash flow involved in the transaction. Hence, if proper disclosures
are not provided in the books of accounts, the reader of financial statements may not
understand the impact of all such recordings.

Documents Required for Preparation of Voucher

 Debit Notes & Credit notes for any purchase return or sale return

39
  In case of any services supplied or procured, debit notes or credit notes
 Bill of the expense in case of prepaid or outstanding expenses.
 Documents for substantiating the correction of any error
 Trail mails can also be used as a basis for journal vouchers.
 Base working for the provisions.

Use and Importance of Vouchers

 It is used for recording the non-cash & non-trading types of transactions.

 It helps the auditors understand the impact of financial transactions in a business.
 It acts as evidence for future reference.
 It forms the basis of rectification entries.

Purpose of Vouchers

 The primary purpose is to correct any business transaction which is wrongly recorded.
Also, the dual purpose is to record non-cash-oriented transactions in the books of
accounts.
 Every transaction does not necessarily involve an outflow. Hence, transactions such as
the depreciation of tangible assets, amortization of intangibles, write off account
balances, adjusting journal entries, etc., require the use of journal vouchers.

Features of Vouchers

1. The journals are standardized

2. Every journal voucher requires information on the following:
o Identification number
o Name of the counterparty
o Transaction amount
o Date of the transaction
o Debit & credit accounts with GL (General Ledger) Codes
o Documentary evidence
o Brief description of the nature of the transaction effected.
3. Every journal voucher requires the approval of an authorized person

40
INVENTORY INFO.

How to create Stock Group?

• Go to Inventory info from Gateway of Tally

. • Choose Stock Group.

• Choose Create

1. Type Stock Group Name

2. Choose Primary on Under option

3. Accept data to save Stock Group.

How to create Unit of Measure?

Stock items are purchased or sold on the basis of quantity. The quantity is measured by
units. Hence it is necessary to create units of measure. You can have simple units such as
number meters, kilograms and pieces or compound units like box of 10 pieces (1 box=10
pieces).

• Go to Inventory info from Gateway of Tally.

• Go to Unit of Measure.

• Choose create

1. Type Symbol of Unit

2. Type Formal Name of Unit

3. Accept data to save.

How To create Stock Item?

The item, for which you maintain quantitative details of materials IN & Out in your
tally system for materials accounting, is known as a stock item.
41
 • Go to inventory info from Gateway of Tally.

• Choose stock Item

• Choose create

o Type Name of Stock Item

o Choose Stock Group on Under option.
o Choose Unit of measure on Unit option
o Set opening balance stock if any

Accept data

MULITIPLE GODOWN:

Godown means a store for keeping the goods safe and secure. It may be warehouse,
rack, shelf or bin etc. It also includes principal's stock on consignment basis.

Settings of Multiple Godown

1. Press F11 from (From Gateway of tally or from Inventory Info Screen or from
Any screen)
2. Choose Inventory features.
3. Set Yes on “Maintain Multiple Godowns” --- ‘yes’
4. Press Enter until you accept data.

This option enables the Godowns option in Inventory info Screen.

How to Create Godown?

1. Go to Inventory info

2. Choose Godown

3. Choose Create and press Enter.

 Type Godown Name

42
  Choose “primary” on Under option (Choose other godown if you are creating sub-
godowns on under option)
 Accept data.

Now Godowns are created. Now when you purchase or sale the stock items tally asked you
the godown name.

How to Check Stock Items Godown wise?

 Go to Display from Gateway of tally.
 Choose Statements of Inventory
 Choose Godowns
 Choose Godown Name and see details of the stock items.
STOCK JOURNAL
This voucher is use to transfer Stock Items from one Godown to another Godown.
This voucher is entered by ALT + F7 on Inventory Voucher.
Source Destination
Name of Item Godown Qty Rate Amount Name of Item Godown Qty Rate Amount

 Choose the Item name which you  Choose the Item name which you
want to transfer want to Store.
 Choose Godown from where you  Choose Godown where you want to
want to transfer Store
 Choose Quantity of Stock Item to  Choose Quantity of Stock Item to be
be transferred Stored
 Give Rate of the stock Item  Give Rate of the stock Item
Press Enter until Cursor moves Destination Press Enter until Accept Data.
column

Physical Stock
This voucher is used to closing the stock on the last of month or last of year, it
known as stock adjustment. On the physical counting, you find that the book stock and stock
found on physical verification may not match; a discrepancy may between the actual stock and
43
the computer stock figure. When the time is comes to close the stock at that time count the
physical stock and enter in physical stock voucher respectively.
This voucher is entered by pressing ALT + F10 Key.
Memo Voucher:
This voucher is entered to remember any transaction. Any voucher entered through
Memo Voucher doesn’t affect in other accounts like P/L a/c, B/L A/c or other books.
PURCHASE AND SALES ORDER PROCESSING
Settings for enabling purchase order and Sales order.
• Go to inventory accounting from Gateway of tally.
• Press F11
• Set “Allow Purchase order processing” ---Yes.
• Set “Allow Sales order processing” -------Yes.
• Press Enter until you accept data.
Purchase order:
We make this voucher when we send order to suppliers to send us some
goods/stock items.
It’s an inventory voucher.
• Go to Inventory Voucher
• Press ALT + F4 key
• Choose Party’s A/c Name: Cash or supplier a/c
• Set Order Number:
• Choose Purchase Ledger: Purchase a/c
• Choose Stock Item name
• Set Due Date
• Set Qty and Rate.
Press Enter until you accept Data.
Sales Order:
We make this voucher when we receive an order from our customer to send goods
or stock items.
It’s also Inventory Voucher
44
 • Go to Inventory Voucher
• Press ALT + F5 Key
• Choose Party’s A/c Name: Cash or Customer a/c
• Set Order Number:
• Choose Sales Ledger: Sales a/c
• Choose Stock Item name
• Set Due Date
• Set Qty and Rate.
Press Enter until you accept Data.
WHAT IS PROFIT & LOSS STATEMENT (P&L STATEMENT)?
Profit and Loss Account is a type of financial statement which reflects the outcome of
business activities during an accounting period (i.e. Profit or loss). Reported income and
expenses are directly related to an organization’s are considered to measure the performance
in terms of profit & loss.

Profit & loss a/c is popularly known as P&L A/c. It is also called as Profit and Loss
Statement of income and expense statement. No matter whether how you call profit & loss
statement, it reveals money spent or cost incurred in an organization’s effort to generate
revenue, representing the cost of doing business.

Objective of Profit & Loss A/c

The very purpose of profit and loss account is to ascertain whether the business is
making profit or loss for a given period. In other words, Profit & Loss Account reveals money
spent or cost incurred in an organization’s effort to generate revenue, representing the cost of
doing business.

Profit and Loss A/c Statement

The profit and loss (P&L) statement is an extremely crucial financial statement that
gives a summary of the revenues, costs, and expenses incurred by a business during a specific
period, usually a fiscal quarter or year.

This component considers all the indirect expenses and incomes including the gross
profit/loss to arrive the net profit or loss.
45
 Debit side of Profit and Loss Account

Items Description

Cost of Sales This term refers to the cost of goods sold. The goods could be
manufactured and sold.

Other Expenses All expenses which are not directly related to the main business
activity will be reflected in the P & L component. The expenses
covered here are mostly related to administrative, selling and
distribution expenses. Examples are salary to office staff, salesmen
commission, insurance, legal charges, audit fees, advertising, free
samples, bad debts etc. It will also include items like loss on sale of
fixed assets, interest & provisions and accrued expenses as well.

Abnormal losses All abnormal losses are charged against Profit & Loss Account. It
includes stock destroyed by fire, goods lost in transit etc.

CREDIT SIDE OF PROFIT AND LOSS ACCOUNT

Items Description

Revenue Incomes These incomes arise in the ordinary course of business,

which includes commission received, discount received
etc.

Other Income The business will generate incomes other than from its
main activity. These are purely incidental. It includes items
like interest received, dividend received, etc,.

46
Components of Profit and Loss A/C
Profit & Loss Account consists of two broad components mentioned below

 Trading Account
 Profit and loss account statement.

TRADING ACCOUNT
Trading Account is an account which is prepared by a manufacturing/merchandising
concern. The purpose of trading account or this financial statement is to find out the gross profit
or gross loss which, is an important indicator of business efficiency. All the expenses and
income which are direct in nature are considered.

The components which form part of the trading account:

Debit side of Trading Account

Items Description

Opening Stock This includes the closing balance inventory carried forwarded from
previous period. In the case of trading concern, the opening stock
includes only finished goods. The amount of opening stock should
be taken from Trial Balance.

47
Purchases The amount of purchases made during the year. Purchases include
cash as well as a credit purchase. The deductions can be made
from purchases related to purchase return, goods withdrawn by the
proprietor, goods distributed as free sample etc.

Direct Expenses It means all those expenses which are incurred from the time of
purchases to making the goods in a suitable condition. These
expenses include freight inward, packaging cost, wages etc.

Gross Profit If the credit side of trading A/c is greater than the debit side of
trading A/c, gross profit will arise.

Credit side of Trading Account

Items Description

Sales Revenue It denotes income earned from the main business activity or
activities. The income is earned when goods or services are sold to
customers. If there is any return, it should be deducted from the
sales value.

Closing Stock This includes all the value of inventory held on the date of closure
of books of accounts. In case of trading business, there will be
closing stocks of finished goods only. According to conservatism
convention, stock is valued at cost or net realizable value
whichever is lower.

Gross Loss If the debit side of trading A/c is greater than the credit side of
trading A/c, gross loss will appear.

48
 Gross Profit If the credit side of trading A/c is greater than the debit side of
trading A/c, gross profit will arise.

How to prepare Profit and Loss Statement?

Traditionally, to prepare profit and loss statement, set of other statements are prepared that
help you gather the data to prepare this statement. Below are the steps to prepare profit and
loss statement

 Prepare ledger accounts:

From the journal book, you need prepare an account statement for each ledger to
determine the closing balance.

 Create trial balance:

Trial balance is a summary of all the ledger accounts. It lists all ledger accounts with
closing balance posted from individual ledger accounts statement

 Preparing trading and profit & loss statement:

Here, all the ledger accounts having a nature of the purchase, sales, direct expense and
income, indirect expenses and income are posted to profit and loss statement in the
structure that we discussed above.

Profit and loss statement being a crucial financial statement and most sought-after
statement for decision making, the requirement to view the reports is more frequent than the
traditional need of viewing it yearly or half-yearly. As a result, most businesses have automated
the process of preparing the profit and loss statement using an accounting software.

Using Tally Prime, the powerful business management, you can generate all the
financial reports automatically with a click of button. Its powerful analytical tolls help you get
more insights to run your business better.

49
 Figure 11

View Profit & Loss Account

You can view the Profit & Loss account details in Tally.ERP 9 for a specified period.

Note: By default, the Profit & Loss A/c report will be generated as on the date of the last
voucher entry. You can change the date to view the report for the required period.

1. Go to Gateway of Tally > Display > Profit & Loss A/c .

2. Click F1: Detailed to view the Profit & Loss Account in detailed format. The Profit &
Loss Account appears as shown below:( Figure 12)

The Profit & Loss Account is generated and updated immediately from the date of
opening of books till the date of last entry.

50
 Figure 12

3. Press F2: Period to change the period as required.

The Profit & Loss A/c is in horizontal form, by default. You can view the report in
vertical format by enabling the option Show Vertical Profit & Loss? by clicking F12:
Configure. You can view additional information or toggle to another report using the options
available in the button bar.

4. Click S: Schedule VI in the Schedule VI Profit & Loss A/c, as shown below:

Figure 13

51
BALANCE SHEET DEFINITION
Balance Sheet is one of topmost financial statement prepared by the businesses. The
financial details of the balance sheet help you and the external stakeholders to evaluate the
financial performance of the business on a given date. Before knowing the steps to prepare a
balance sheet and reading the balance sheet, it is important to be familiar with the components
and format of the balance sheet.

Balance Sheet Format:

Balance Sheet format includes assets on one side and liabilities on the other. For
balance sheet to reflect the true picture, both sides should tally. For us to understand the balance
sheet format, we must know the components which forms part of it.

LIABILITIES
Liabilities Equity
 Current Liabilities  Shareholders capital
 Long-term liabilities  Additional paid-in capital
 Retained Earnings

ASSETS
 Current Assets
 Buildings, Plant and Machinery
 Investments
 Other Assets

How to prepare balance sheet?

Just like every other report, the source for you to prepare a balance sheet is from the
transactions accounted in your books of accounts. In the process of preparing the balance sheet,
you need to prepare other financial statements which will help you gather the accounting data.
Let’s start with a step-by-step process to prepare the balance sheet.

52
Steps to prepare balance sheet
As mention in the above illustration, you need to follow 4 steps to complete the balance
sheet. The steps are listed and explained below:

 Preparing ledger account

 Creating trial balance
 Preparing trading and profit & loss account
 Preparing balance sheet

Step- 1: Prepare ledger accounts

From the transaction you have accounted in the journal book (a book where day to day
transactions are recorded), you must prepare an account statement for each ledger to determine
the closing balance. This is because a ledger account may have several transactions and there
is no way that journal book will tell you the current balance of each account.

Here, preparing ledger account is nothing but posting all the debit and credit
transaction into a statement belonging to a ledger account. For example, in preparing cash
ledger account, you must post all debit (receipts) and credit (payments) into statement and
difference between these two including the opening balance of cash will be the closing balance.

Step-2: Create trial balance

Trial balance is a summary of all the ledger accounts. It lists all ledger accounts with
closing balance posted from individual ledger accounts statement (discussed above). The
format of trial balance consists of the Debit column and Credit column in which the closing
balance of each ledger accounts will be posted.

As a thumb rule, the total of debit balance in trial balance should match the total of
credit balance. Only when it matches, it is assumed that the posting and ledger accounts are
arithmetically correct. The purpose of preparing trial balance is to ascertain whether recording
and posting of ledger accounts are correct. It’s the first statement in the process of preparing a
balance sheet and hence, it always preferred to do a trial check whether every debit is equal to
the credit.

53
 Figure 14

Step- 3: Preparing trading and profit & loss account

Profit and loss accounts is a financial statement prepared to know the profitability of
the business. This consists of 2 sections namely Trading account and profit & loss account.
Most businesses combine these two in a single statement and few, especially into
manufacturing segment prefer to prepare separately.

Trading Account reflects the result of buying and selling of goods including the direct
cost associated with it. It shows the gross loss or gross profit without considering the
operational expenses and incomes. On the other side, profit & loss account shows you the net
profit considering the gross profit/loss and all the indirect expenses and income.

Trading and Profit & loss account consists of all the ledger accounts having a nature of
the purchase, sales, direct expense and income, indirect expenses and income. While preparing
Trading and profit & loss account, you need to post only the ledgers belong to above nature.

54
 Figure 15

Step-4: Prepare Balance Sheet

Now that you have prepared all the above statements, it’s time to prepare a balance
sheet. You need to consider all the ledgers which are non-revenue in nature. In other words, all
the ledgers except the one which you have already considered for the Trading and Profit & loss
account should be considered for the balance sheet.

Broadly, the balance sheet consists of assets and liabilities. In the process of preparing
a balance sheet, first, start with the assets side. Start capturing fixed assets ledgers like land and
buildings, furniture, etc., and then investments and all the current assets like cash,
Bank, Accounts receivables, Closing stock, etc.

Next step is to bring all the ledgers having nature of liability under the liabilities side
of the balance sheet. Remember, if there is any adjustment like depreciation, bad debts, etc.
you can do it in the balance sheet as well.

Once you have captured all details into the balance sheet, the assets side should be equal
to the liabilities side of the balance sheet. Only then, your balance sheet is arithmetically
correct.

55
View Balance Sheet

The Balance Sheet in Tally Prime will help you monitor the health of your
business and also take timely decisions for its growth and betterment.

1. Gateway of Tally > Balance Sheet. You can see the Liabilities for your
company on the left and the Assets on the right.
Alternatively, Alt+G (Go To) > type or select Balance Sheet > press Enter.

Figure 16

2. Press Alt+F5 (Detailed) for a comprehensive view of the Balance Sheet. You
can see the details of your assets (such as cash in the bank, inventory, vehicles,
equipment, buildings, and accounts receivable) and liabilities (such as taxes,
loans, mortgages, and accounts payable).

56
 Figure 17
If you have a group company in Tally Prime, you can use the Balance Sheet to
view the consolidated financial data and measure the overall performance of your
business.

What is Payroll?
Payroll is simply an aggregation of total amount of wages paid by the company to its
employees. It is one of the most significant expenses for businesses; hence it is very
complicated expense for companies to process. Processing payroll slips is a very time-
consuming task and can be prepared weekly, semi - monthly or monthly depending upon the
resources which the company has in its reserve.

Create Employees (Payroll)

The employee master in Tally. ERP 9 can be used record all employee-related
information. You can capture not only general information consisting basic details of the
employee but you can also enter Payment, Statutory, Expat and Contract details of employees.
To enter Statutory related information in the Employee Master, enable the option Show
Statutory Details in the Payroll Configurations screen.

57
Salient Payroll features in Tally. ERP 9

 Payroll accounting in Tally offers the benefits of simplified Payroll processing and
accounting due to its added benefit of integration with accounts.
 The Pay roll module in Tally. ERP 9 reports comprehensively as it has user defined
classifications and sub classifications. This might be associated with the employees,
employee groups, pay components, departments etc.
 The payroll module also lets flexible and user defined criteria for users.
 It also offers the facility to create user defined earnings and deductions pay heads.
 The module lets us use unlimited grouping of Payroll Masters.
 Supports production/attendance/time-based remuneration units which are user defined
production units.
 It offers all-inclusive cost centre as well as employee wise costing reports.
 Ensures timely and precise processing of salary along with employee statutory
deductions and employer statutory contributions with the help of predefined processes.
 It helps generate Statutory forms and challans for EPF & ESI as prescribed.
 The payroll module helps in tracking the loan details of employees as well.

How to generate a payslip in Tally ERP 9?

We can generate a payslip in Tally with just 6 simple steps:

The first step is to create employee master.

Step 1

· Path for employee creation: - G.O.T. (Gateway of Tally) --> Payroll Info
--> Employees --> Create (Single).

· Path for employee group creation: - G.O.T. (Gateway of Tally) -->

Payroll Info --> Employee Group --> Create (Single).

We are here required to enter the requisite Employee Details & Employee
group by grouping employees under the function they perform such as their
department or designation.
The next step in this process is to create payroll units.
Step 2

58
 Path for attendance/ production types creation: - G.O.T. (Gateway of Tally)
--> Payroll Info --> Attendance/ Production Types --> Create.

Here we are required to brief on Attendance/Production type which will be

used to record the Attendance and Production details.
In this step we will create pay heads for salary components.
Step 3

Path for pay head creation: - G.O.T. (Gateway of Tally) --> Payroll Info -->
Pay Heads --> Create.

All the components of structured salary are created under Pay Head. Pay head
creation in Tally ERP 9 is very user-friendly as it allows creating any complex
type of pay heads.
In this stage we will journalize or record salary details.
Step 4

Path for salary detail creation: - G.O.T. (Gateway of Tally) --> Payroll Info -
-> Salary Detail --> Create

Here we will key into the Tally ERP 9 system the details of salary applicable
for both Employee Groups as well as Individual Employees with earnings,
deductions and basis of computation.
path for voucher creation: - G.O.T. (Gateway of Tally) --> Payroll Voucher -
Step 5
-> Press “Ctrl + F5” and then press “Ctrl + F4” to open payroll voucher: and
finally Press “Alt + A” to auto fill information.

This is the final step in the process to pass payroll voucher

Here we will be required to enter all Earnings and Deductions in payroll

transactions that are paid along with the salary payslip for all employees.
To generate the payslip created.
Step 6

Path for view report of payroll: - G.O.T. (Gateway of Tally) --> Display -->
Payroll Report --> Statement of Payroll

59
 Finally we have to generate the Payslip which will provide details of employee
such as attendance details, and we will also see that Tally ERP 9 system
itemizing each components of employee’s earnings and deductions, and
displaying the net amount paid to him for a given pay period.

Create Multiple Employees

1. Go to Gateway of Tally > Payroll Info. > Employees > Create (under Multiple
Employees).

2. Select the employee group under which you want to create all the employees, in
the Under Employee Group field. If an independent employee is to be created,
select All Items in this field.

3. Select the employee category in which you want to add the group, in
the Category field. The default category Primary Cost Category appears selected in
this field.

4. Specify the name of the employee in the Employee Name field.

5. Select the employee group into which you want to add the employee in the Under field.

6. Select the Regular Tax Regime (old regime) or Tax Regime U/s 115BAC (new regime)
in the Applicable Tax Regime column.

7. Enter the employee's PAN in the Income Tax Number (PAN) column.

8. Enter the joining date of the employees in the Date of Joining field.

The Multi Employee Creation screen appears, as shown below, displaying the details
of employees you added.

60
 Figure 18

9. Press Ctrl+A to accept the changes.

In the Multi Employee Alteration screen, there is an additional column provided to capture
the effective from date for the tax regime selected. The Multi Employee Alteration screen
appears as shown below:

Figure 19

Note: In Multi Employee Creation and Multi Employee Alteration screens, you can disable tax
regime details by setting the option Show Tax Regime to No under F12: Configure. Further,
you can enter date of leaving in the alteration screen by enabling Show Date of Leaving option.

VAT (value added tax):

VAT is a system of indirect taxation, which has been introduced in lieu of sale tax.
It is the tax paid by the producers, manufactures, retailers or any other dealer who add value to
the goods and that is ultimately passed on to the consumer. VAT has been introduced in India
to ensure a fair and uniform system of taxation. It is an efficient, transparent revenue-neutral,
globally acceptable and easy to administer taxation system. It benefits the common man
(consumer), businessman and Government.
61
 The cascading effect is brought about by the existing structure of taxation where
inputs are taxed before a commodity is produced and the output is taxed after is produced. This
causes an unfair double-taxation. However, is VAT, a set off is given for input tax (tax paid on
purchased). This result in the overall tax burden being rationalized and a fall in price of goods.
VAT PAYABLE= OUTPUT TAX- INPUT TAX
Advantage of VAT:
• Uniform tax rates across the country.
• Simplify producers to help lower prices by eliminating the effects of
taxation.
• Reduce total tax expenses and improve cash flows.
• It will also increase transparency in the way we do business.
Enabling VAT Returns
Go to Gateway of Tally> Accounts Info. > F11: Features > F3: Statutory & Taxation
1. Set Enable Value Added Tax (VAT) to Yes
2. Select Type of Dealer as Regular
3. Enter the VAT Registration number
4. Enter VAT Applicable from date
5. Enter the Line of Business
6. Enter RDO Code given by the Philippines Customs and Excise Department
7. Accept to save the changes.
TDS (Tax Deducted at source)
Tax deducted at source is one of the modes of collecting income tax from the
taxpayers as per the rates mentioned under IT Act and Rules. The deductor of the Tax (TDS)
deducts the tax form the deductee, on payment of specified incomes and deposits the same to
the credit of central government within the specified period along with the challan in prescribed
format.
TDS Features
i. Simple and user-friendly
ii. Quick and easy to set up and use
iii. Create single Expenses Ledger for Multiple Nature of Payment

62
 iv. Create single TDS Duty Ledger for Multiple Nature of Payment
v. Book & Deduct TDS in the same voucher
vi. Single TDS deduction for multiple vouchers
vii. Single TDS deduction for Multiple Nature of Payments
viii. TDS deduction on partial applicable value
ix. Retrospective Surcharge Deduction
x. Party wise configuration for Lower / Zero rate
xi. Party wise configuration to Ignore IT / Surcharge exemption Limit
xii. TDS deduction on Non-Resident payments
xiii. Reversal of TDS
xiv. Deduction of TDS on advance payments
To enable TDS Feature
• Go to Gateway of Tally > F11: Features > F3: Statutory & Taxation
• Set > Enable Tax deducted at Source to Yes
• Enable>Set/Alter TDS Details to Yes
• The Statutory & Taxation features screen appears
TCS in Tally
TCS (Tax Collected at Source) is the tax that a seller collects from the buyer
during the sale of specific goods under provision 206C, or any other goods on the
basis of realisation. Tally Prime not only supports the latest budget changes for TCS
but also provides you with a comprehensive TCS solution for your business
needs. You now have the flexibilit y to calculate TCS either after receiving the
payment or during billing.

If you are a seller of goods such as timber wood, tendu leaves, scrap, and so
on, then you have to collect TCS at the time of sale. However, as per the latest budget
changes, TCS will be charged for other goods as well when the value of sales or
receipt crosses Rs 50 lakhs for a particular party. This is applicable only for sellers
whose annual income has exceeded Rs 10 crore in the previous financial year. Tally
Prime provides you with the option to track the threshold limit for a party. TCS will

63
be automatically calculated when the sales exceed the threshold limit (Rs 50 lakhs,
for instance) for the party across transactions.

You now have the choice to calculate TCS on either realisation/receipt of the
invoice value or directly in the invoice (accrual method), depending on your business
practice. If you choose accrual, then you will collect TCS while billing the
customers. If you choose realisation, then you will collect TCS on receipt of the
invoice value. Tally Prime provides you with the flexibility to apply either method
of calculation as per the Nature of Goods. Once you have selected the basis of
calculation, it will be applied to all your transa ctions under that particular Nature of
Goods. For instance, you can set TCS calculation on accrual for the sale of goods
such as luxury cars or timber wood, and on realisation for any other goods.
Accordingly, Tally Prime will keep aggregating the values for each party across
transactions and calculate TCS once the aggregate amount crosses the threshold limit
for a party.

Apart from recording transactions based on realisation and accrual, you can
also calculate TCS on advance receipt and record TCS-exempt transactions for
government-listed buyers and buyers deducting TDS. You can view and track the
status of your TCS-related transactions in Form 27EQ in Tally Prime, and identify
any incomplete information or mismatch in details. Once you verify the details, you
can export the details as a text file and proceed for filing TCS returns.

What’s more, with Tally Prime you can easily configure TCS in either the
stock items or in the sales ledger, which will help you calculate TCS with great ease
and accuracy. If you have hundreds or thousands of stock items, then you don’t have
to configure TCS for each stock item. You can just configure TCS in the sales ledger,
and the TCS amount will be calculated in the transaction. For some reason, if you do
not want to calculate TCS in the transaction, then you can set TCS to Not applicable
in the stock items or sales ledger.

Enable TCS

You can enable the TCS feature in Tally. ERP 9, provide surcharge details, record
transactions and generate the required reports and returns.

64
1. Go to Gateway of Tally > F11: Features > Statutory and Taxation.

2. In the Company Operations Alteration screen, set Enable Tax Collected at Source
(TCS) to Yes

3. Enable the option Set/alter TCS details. The Company Operations

Alteration screen appears as shown below:

Figure 20

4. Press F12

● Set Enable surcharge and cess details for TCS to Yes .

Figure 21

● Press Ctrl+A to save.

5. Enter the TAN registration number.

6. Enter the Tax deduction and collection Account Number (TAN).

7. Select the Collector Type

65
 8. Enter the Collector branch/division

9. Enable the option Set/alter details of person responsible to display the Person
Responsible Details screen. Enter the relevant details:

Figure 22
Note:
♦ In Release 6.5.5 and later versions, you can enable the TCS features for a company
located in Ladakh. You can select the State as Ladakh in the Person Responsible
Details screen.
♦ The name of new union territory Dadra & Nagar Haveli and Daman & Diu is provided
in Release 6.6.3. All masters with Daman & Diu and Dadra & Nagar Haveli are
automatically updated with the name of new union territory.

10. Press Enter the TCS Collector Details screen appears.

11. Set Ignore IT Exemption Limit to:

● Yes, if you don't want to consider the IT exemption limit.

66
 ● No, if you want to consider the IT exemption limit.

12. Set Provide surcharge and cess details to Yes. This option appears only when you
have set Enable surcharge and cess details for TCS to Yes in the configuration
screen.

13. Enter the surcharge and cess details for each collectee status. You can enter the
required surcharge slab details with the applicability date.

Figure 23

14. Press Ctrl+A to save the details.

GOODS AND SERVICE TAX ACT 2017

GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods
and Service Tax Act was passed in the Parliament on 29th March 2017. The Act came into
effect on 1st July 2017; Goods & Services Tax Law in India is a comprehensive, multi-stage,
destination-based tax that is levied on every value addition.

In simple words, Goods and Service Tax (GST) is an indirect tax levied on the supply
of goods and services. This law has replaced many indirect tax laws that previously existed in
India.

Types of taxes under GST

There are currently three types of GST

67
  CGST – Central GST – Applies to sales within the state – goes to Central Government
 SGST – State GST – Applies to sales within the state – goes to State Government
 IGST – Integrated GST – Applies to sales outside the state – goes to Central
Government

For example, if you sell something within the state, 50% of the GST will be CGST and
50% of the GST will be SGST. But when you sell something outside a state, 100% of it will
be IGST which will go to the Central Government.

How to begin Tally ERP 9?

In order to use Tally, following steps must be followed

To create a company in Tally

To enable GST Features
To create ledgers

Let’s discuss the above in detail

I. To create a company in Tally
Step 1: - Go to Gateway of Tally > Alt + F3 > Create Company
Step 2: - Enter the basic information, i.e., name, mailing name and address of the
company, currency symbol etc.
Step 3: - In the ‘maintain field’, select Accounts Only or Accounts with Inventory as per
the company requirements.
Step 4: - In the Financial Year from, the first day of the current financial year for e.g., 1-
4-2018 will be displayed by default, which can be changed as per requirement.
Step 5: - Enter the Tally Vault Password if required.
Step 6: - Press Y or Enter to accept and save.

II. To enable GST features in Tally

Step 1: - Go to Gateway of Tally > F11: Features > F3 : Statutory & Taxation
Step 2: - In the screen you will find the following options

o Enable goods and service tax (GST): Yes

68
 o Set/alter GST Details: Yes.

This will display another screen where you can set GST details of the company
such as the state in which the company is registered, registration type, GSTIN
number etc.
Step 3: - Press Y or Enter to accept and save.

III. To create ledgers

After creating a company and activating GST features, you need to create ledgers that
will enable you to pass accounting entries in Tally ERP 9.

Step 1: - Go to Gateway of Tally > Accounts Info > Ledgers > Create
Step 2: - Create ledgers such as Purchase, Sales, State GST, Central, Integrated GST, Stock
item names etc.
Step 3: - Select the appropriate group to which such ledger belongs for example state tax under
duties and taxes group.
Step 4: - Enter the other related information required and press Y or Enter to accept and save.
After creating ledgers, we can proceed with preparing accounting entries in Tally ERP9
For that we have to follow: -

Gateway of Tally > Accounting Vouchers

There are many accounting vouchers in Tally such as Payment, Receipt, Contra, Sales,
Purchase, etc. After choosing the relevant voucher we start passing the accounting entries.

How will GST work in Tally ERP 9?

The functionality of GST in Tally is almost the same as prevalent during erstwhile
taxation laws such as VAT or CST or Service Tax.

The first step before passing an Accounting Entry in Tally is to make GST Calculation.
But first, let’s take an example for our understanding. For example: M/s ABC Ltd of Mumbai
sold goods worth Rs. 50,000/- to M/s XYZ Inc. of Ahmedabad; GST rate applicable for the
given product is 18%

69
 GST Calculation - M/s ABC Ltd has to collect GST and say it is 18%. Then GST
will come at Rs. 9,000/-.
Taxable Value - This is the portion on which tax will be levied (i.e.,) Rs. 50,000/-
in this case.
Type of Tax to select - Since it is a transaction involving Inter-State trade, the ledger to
create and select while preparing accounting entry
is IGST ledger.
Rate of Tax to be fed 18% IGST (Tax type: Integrated Tax) .
during Tax Ledger
creation screen
Tax rate to key while 18% IGST and Tally will automatically bifurcate and distribute
preparing Stock Item the tax rate to CGST and SGST as 9% each.
Ledger -
Other ledgers to create - Create XYZ Inc., ledger along with GSTIN number.

Now we have to go to the Accounting Voucher Screen and fit these details in Sales
Voucher screen (F8). We are also not required to worry about tax calculation as Tally
automatically calculates Tax amount portion based on the details fed in Stock Item Creation
Screen and Tax ledger creation screen.

WHAT IS A CASH BOOK IN TALLY?

Cash Book in Tally is a financial record-keeping system that tracks all cash
transactions. It provides an easy, automated way to keep track of all cash inflows and outflows.
It records income from sales, expenses, payments, and other transactions. All entries are stored
in an accounting ledger, which can be viewed in Tally's main interface.

Tally's cash book allows users to easily categorize their transactions, making it easier
to view and analyze their financial data. It also includes features that enable users to generate
financial reports, set up reminders, and manage their budgets. This makes it easier to track
expenses, analyze performance, and identify areas of improvement. It helps users make more
informed financial decisions and ensures accurate financial record-keeping.

70
How to create a Cash Book in Tally?

A Cash Book is a record of all cash transactions that take place within a business. It is
an important document used to keep track of cash inflows and outflows and can help a business
to monitor their financial position. Tally is a popular accounting software used to create a Cash
Book.

To record a cash receipt, go to the "Accounting Vouchers" menu and select "Receipt."

The Cash Book in Tally will keep a record of all cash transactions and can be used to
monitor the financial position of your business.

Steps to Create Cash Book in Tally

To create a Cash Book in Tally, follow these steps:

1. Open Tally and navigate to the Gateway of Tally screen.

Figure 24

71
2. Select the "Accounts Info" menu, then select "Ledgers" and "Create" from the sub-
menus.

Figure 25

3. Enter the name of the Cash Book in the "Name" field and select "Cash" as the "Group"
from the drop-down menu.

Figure 26

4. In the "Opening Balance" field, enter the starting balance of the Cash Book.

72
 5. In the "Under" field, select the appropriate parent group or ledger under which
the Cash Book will be created.

Figure 27

6. Select the "Cash and Bank" option in the "Type of Account" field.
7. If the Cash Book is for a specific bank account, enter the bank account details
in the "Bank A/C Name" and "Bank Branch" fields.

Figure 28
73
8. Select the "Create" button to save the Cash Book.

The Cash Book will now be listed in the Ledgers list in Tally. You can now use the Cash Book
to record transactions and manage your organization's cash flow.

Tips for Using a Cash Book in Tally Effectively

Some tips and tricks for businesses that use the cash book feature in Tally can help maximize
its effectiveness

1. Always keep accurate records of your transactions. It is important to keep track of all
the money that goes in and out of your business to understand your company's financial
health. You can easily and accurately record all your transactions using Tally's
cashbook feature.
2. Utilize the cash book as a forecasting tool. By entering your projected cash inflows and
outflows, you can use the cash book to forecast your financial future. This is especially
helpful for businesses that have irregular cash flow patterns.
3. Use the cash book to compare and analyze expenses. By entering all your expenses into
the cash book, you can easily compare and analyze them for better financial decision-
making.
4. Use the cash book to keep track of your accounts receivable and accounts payable. By
entering all your accounts receivable and accounts payable into the cash book, you can
easily track who you owe you money and who you owe money to.
5. Take advantage of the cashbook’s reporting features. Tally’s cash book can generate
reports on your income and expenses, allowing you to better understand your financial
health.

By following these tips, you can effectively use the Tally cash book feature to maximise your
business's financial performance.

Benefits of Displaying a Cash Book in Tally

Tally is a popular accounting software used to manage business transactions and
accounts. Keeping a cashbook in Tally helps keep the business's financial records organized
and up to date. It also allows the company to quickly generate financial reports and keep track
of its financial health.
74
Following are some of the benefits of displaying a cash book in Tally:

1. Easy to Track Cash Flow:

Cash flow is a key indicator of a business’s financial health. By displaying a cash book
in Tally, businesses can easily track their cash flow and ensure that their finances are in order.
This makes it easier for businesses to make informed decisions about their finances.
2. Easy to Reconcile Transactions:
Tally allows users to easily reconcile transactions by displaying a cash book. This
makes it easier for businesses to track their finances and ensure that their financial records are
accurate and up to date.
3. Easy to Generate Reports:
Tally also makes it easy to generate financial reports such as balance sheets, income
statements, and cash flow statements. This makes it easier for businesses to keep track of their
financial health and make informed decisions.
4. Easy to Maintain Ledgers:
Tally also makes it easy to maintain ledgers. This helps businesses to keep track of their
accounts and ensure that their financial records are accurate. Overall, displaying a cash book
in Tally makes it easier for businesses to track their cash flow, reconcile their transactions,
generate financial reports, and maintain ledgers. This makes it easier for businesses to keep
their finances in order and make informed decisions.
SHORTCUT KEYS IN TALLY

SHORTCUT ACTIONS
KEYS

F1 Select or open the company using this key.

Alt + F1 To see the constrained messages, use this shortcut key to
select the inventor.
Ctrl + F1 This key could be used for selecting a payroll voucher from
the accounting screen or Inventory voucher.
F2 To change the date.
F3 Tax Properties and selecting the company for selecting the
corporate statutes.

75
F4 For selecting the Contra Voucher.
F5 To select the payment client.
F6 To select a Receipt Voucher.
F7 To select a Journal Voucher.
F8 To have a choice of Business Voucher.
Ctrl + F8 To select a Credit Note Voucher.
F9 To select any Purchase Voucher.
Ctrl + F9 To initiate Selection of Debit Note Voucher.
F10 To select any Reverse Journal Voucher.
Ctrl + F10 To initiate selection of Reminder Voucher.
F11 For selecting Screen Functions.
F12 To go to the Configuration Screen.
Alt + 2 To initiate use for Duplicate Voucher.
Alt + A Adding the voucher to change to make a change in the center
of the column report.
Alt + B To check Outstanding balances.
Alt + C To create a master on voucher screen (This will work only if you
have not changed the function for the same).
Alt + D To remove the Voucher or Delete the Master. Remove the table
in the column report using this key.
Alt + E For exporting the reports in ASCII, Excel, HTML, PDF, XML
format.
Alt + I To Insert Voucher/ Changes Between Items and Accounting.
Alt + G For Selecting Language Configuration.
Alt + K For making keyword configurations.
Alt + O To Upload Reports.
Alt + G To arrive at the Language Selection for Tally ERP 9.
Alt + M For Deleting any message.
Alt + N For Displaying Messages in Automatic Columns.
Alt + P To initiate Printing of the Report.
Alt + R For Removing Line from Report.

76
Alt + S To check the Public Return of the Line Removed with Alt + R.
Alt + U To Get the Last Used Line which was also removed before.
Alt + V For Connecting invoice Screen with Stock Journals Screen.
Alt + X To cancel Voucher in Daily List or Voucher List.
Alt + R For Registering your Tally ERP 9.
Ctrl + B For accommodation of Budget.
Ctrl + Alt + B To Check the Statutory Details of the Company.
Ctrl + C For choosing the Cost category.
Ctrl + E To select any currency.
Ctrl + G For selecting Group.
Ctrl + H To take help from Help & Support Center.
Ctrl + I For Selecting the Items in Stock.
Ctrl + Alt + I For Implementation of Legal Masters.
Ctrl + K For Logging in to Remote User Http://Tally.Net
Ctrl + L For ledger selection.
Ctrl + O For checking the Godowns in Tally Selection.
Ctrl + Q The Screen exits and is left without Changes saved.
Ctrl + R Helps you to Return directly to the Voucher Type.
Ctrl + Alt + R To access the Company’s Data.
Ctrl + S To Change the Master of the Attack Items.
Ctrl + U For Selecting any Unit.
Ctrl + V To initiate Selection of Voucher Types and Wiring Between
Billing and Goods.
Ctrl + K For connecting directly to the Control Center.
Ctrl + H To access the Help Center directly where You Can Send Questions
Directly to the Tally erp9 developer and tally executives.
Alt + ENTER To view the Voucher Display.
Alt + S To forsee the Financial Report.
Alt + F1 For Detailed News.
Alt + F2 To Change the Period.
Alt + F3 To modify company information.

77
Alt + F4 To select the Trading order Type.
Alt + F5 For Selection of Sales order. Also, to gain Monthly and Quarterly
display.
Alt + F6 For the selection of the order. To select or reject the voucher type.
Alt + F7 For Choosing an additional Vehicle Type to Accept all kind of
Tests.
Alt + F8 For initiating the Display of Columnar Report.
Alt + F9 For the selection of External Paper Type.
Alt + F10 To select the Physical Vehicle Type.
Alt + F12 For filtering of Money Value information.
Alt + J For the selection of Job Work Out Order Voucher.
Alt + W For selecting Job Work in Order Voucher.
CTRL + A For selecting a Form.
CTRL + N To Switch to Calculator.
R To generate ratio.
S To look for stock.
P To go to P&L.
B To go to the Balance Sheet.
D+T To go to Trial Balance.
E For developing Order Voucher.
T For developing Inventory Voucher.
Ctrl + Alt + F12 For going to Advanced Configuration.

PgUp Helps Displaying the Previous Voucher When You Change the
Voucher.
PgDn Helps to display the Next Voucher While Changing the Voucher.
Esc + Enter To Exit.
Q + Enter For Quitting.
ENTER To Accept Anything in a Field.
ESC For Clearing the Entry.
Shift + ENTER To Condense Next Level of Details.

78
 CTRL + ENTER To change the Master While Entering or Displaying a Message.

EXAMPLE: 1

Journalize the following transactions

1. Commenced business with cash Rs.10, 000.

2. Deposit into bank Rs. 15,000

3. Bought office furniture Rs.3,000

4. Soled goods for cash Rs.2,500

5. Purchased goods form Mr X on credit Rs.2,000

6. Soled goods to Mr Y on credit Rs.3,000

7. Received cash form Mr. Y on account Rs.2,000

8. Paid cash to Mr X Rs. 1,000

9. Received commission Rs. 50

10. Received interest on bank deposit Rs. 100

11. Paid into bank Rs. 1,000

12. Paid for advertisement Rs.500

79
13. Purchased goods for cash Rs. 800

14. Sold goods for cash Rs. 1,500

15. Paid salary Rs. 500

SOLUTION:

Key Voucher Type of

Ledger Group Principles Amount
account

1 F6 Receipt Cr. Capital Capital account Personal Giver 10,000

Dr. Cash Cash in hand Real Comes in 10,000

2 F4 Contra Cr. Cash Cash in hand Real Goes out 15,000

Dr. Bank Bank account Real Comes in 15,000

Payment Dr. Office

3 F5 Fixed asset Real Comes in 3,000
furniture

Cr. Cash Cash in hand Real Goes out 3,000

4 F8 Sales Dr. Cash Cash in hand Real Comes in 2,500

Cr. Sales Sales account Real Goes out 2,500

Purchase
5 F9 Cr. X Sundry creditor Personal Giver 2,000

Dr. purchase Purchase account Real Comes in 2,000

6 F8 Sales Dr. Y Sundry debtors Personal Receiver 3,000

Cr. Sales Sales account Real Goes out 3,000

7 F6 Receipt Cr. Y Sundry debtors Personal Giver 2,000

80
 Dr. cash Cash in hand Real Comes in 2,000

Payment
8 F5 Dr. X Sundry creditor Receiver 1,000
Personal

Cr. Cash Cash in hand Real Goes out 1,000

Cr. Nominal Credit all

9 F6 Receipt Indirect income 50
commission income

Dr. cash Cash in hand Real Comes in 50

Cr. Interest
Nominal Credit all
10 F6 Receipt on bank Indirect income 100
income
deposit

Dr. Bank Bank account Real Comes in 100

11 F4 Contra Cr. Cash Cash in hand Real Goes out 1,000

Dr. Bank Bank account Real Comes in 1,000

Dr.
Payment Nominal Debit all
12 F5 Advertiseme Indirect expenses 500
expenses
nt

Cr. Cash Cash in hand Real Goes out 500

Purchase
13 F9 Cr. Cash Cash in hand Real Goes out 800

Dr.
Purchase account Real Comes in 800
purchase

14 F8 Sales Dr. cash Cash in hand Real Comes in 1,500

Cr. Sales Sales account Real Goes out 1,500

81
 Payment Nominal Debit all
15 F5 Dr. salary Indirect expense 500
expenses

Cr. Cash Cash in hand Real Goes out 500

EXAMPLE 2
Do the voucher entry for the transactions
Mr. Girish started business with Rs. 1,00,000

Bought furniture for Rs.1,000

Goods purchased for Rs.1,500

Goods sold for Rs.2,500

Goods purchased from Selva & Co for credit worth Rs.7,500

Goods sold from Cheenu & Co for credit worth Rs.10,000

AIM

To create a Voucher Entry from the transactions.

PROCEDURE

Step 1: Company Creation

Start  Programme  Tally 9  Gateway of Tally Alt F3 Create Company

 Save

Step 2: Ledger Creation

Gateway of Tally  Account info  Ledger  Multiple Ledger  Create

5. Mr. Girish Capital  Capital a/c

6. Furniture a/c  Fixed Asset

7. Purchase a/c  Purchase a/c

8. Sales a/c  Sales a/c

9. Selva & Co  Sundry Creditors a/c

82
 10. Cheenu & Co  Sundry Debtors a/c

Figure 2.1

Step 3: Voucher Entry

Gateway of Tally  Accounting Vouchers

(i) Receipts (F6)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Cash a/c ……………………………... Dr 1,00,000

To Girish capital a/c 1,00,000

(ii) Purchase (F9)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Purchase a/c ………………………... Dr 1,000

To Cash a/c 1,000

83
(iii) Purchase (F9)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Purchase a/c ………………………... Dr 1,500

To Cash a/c 1,500

(iv) Sales (F8)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Cash a/c ………………………... Dr 2,500

To Sales a/c 2,500

(v) Purchase (F9)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Purchase a/c ………………………... Dr 7,500

To Selva & co a/c 7,500

(iv) Sales (F8)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Cheenu & co a/c …………………... Dr 10,000

To Sales a/c 10,000

REPORT:
84
Voucher entry for all the transaction created.

Figure 2.2

Figure 2.3

85
 Figure 2.4

EXAMPLE: 3

Alter the following vouchers:

Entry No Date Party Name Alternations

4 7.4.2019 Britannia Industries Order No. SO 118-due on 7.4.2019

6 9.4.2019 Britannia Industries Order No. SO 156-due on 10.4.2019 for

both items

33 3.5.2019 Beauty Care Centre Order No. So 1189-due on 5.5.2019

41 5.5.2019 Beauty Care Centre Order No. SO 2369-due on 15.5.2019

SOLUTION:
AIM:
To Alter the date of existing company
86
Step 1:

From the Gateway of Tally press Alt+F3 Key to involve the Company info

Step 2:

In company info select alter the date option

Step 3:

Select the Company

Step 4:

Make the changes in the alteration screen displays and press Ctrl+A to save and quit

EXAMPLE: 4
Enter the following transactions of the company in Tally and show various reports
January 1 Commenced business with a capital of 80,000
January 3 Purchased machinery 10,000
January 5 Withdrawn from bank for office use 10,000
January 7 Purchased goods from Siama on credit 9,000
January 8 Paid cash to Siama 8,800
Discount received 200
January 11 Sold goods to Kima 5,000
January 16 Received cash from Kima 4,900
Discount allowed 100
January 18 Purchased goods from Siama from cash 6,000
January 20 Paid wages 3,000
January 22 Rent received 5,000
SOLUTION:
AIM:
To prepare a Trading and Profit and Loss account and a Balance Sheet
PROCEDURE
Step 1: Company Creation

Start  Programme  Tally 9  Gateway of Tally  Alt F3  Create Company

87
 Save

Step 2: Ledger Creation

Gateway of Tally  Account info  Ledger  Multiple Ledger  Create under

group  All items

Sl. No. Name of Ledger Under

1. Anu Capital Capital a/c

2. Machinery Fixed Asset

3. Bank Bank a/c

4. Siama Sundry Creditors a/c

5. Purchase Purchase a/c

6. Kiama Sundry Debtors a/c

7. Discount received Indirect Income

8. Sales Sales a/c

9. Discount Allowed Indirect Expenses

10. Wages Indirect Expenses

11. Rent Indirect Income

Step 3: Voucher Entry

Gateway of Tally  Accounting Vouchers  Enter in necessary Voucher Type 

Save

(i) Receipts (F6)

88
 PARTICULARS DEBIT CREDIT

Rs. Rs.

Cash a/c ……………………………... Dr 80,000

To Anu Capital a/c 80,000

(ii) Payment (F5)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Machinery a/c ………………………... Dr 10,000

To Cash a/c 10,000

(iii) Contra (F4)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Cash a/c ……………………………... Dr 10,000

To Bank a/c 10,000

(iv) Purchase (F9)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Purchase a/c ………………………... Dr 9,000

To Siama a/c 9,000

(v) Payment (F5)

89
 PARTICULARS DEBIT CREDIT

Rs. Rs.

Siama a/c ………………………... Dr 9,000

To Cash a/c 8,800

To discount received a/c 200

(vi) Sales (F8)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Kiama a/c ………………………... Dr 5,000

To Sales a/c 5,000

(vii) Receipt (F6)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Cash a/c ………………………... Dr 4,900

Discount Allowed …………….... Dr 100

To Kiama a/c 5,000

(viii) Receipt (F6)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Cash a/c ………………………... Dr 6,000

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 To Siama a/c 6,000

(ix) Payment (F5)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Wages a/c ………………………... Dr 3,000

To Cash a/c 3,000

(x) Receipt (F6)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Cash a/c ………………………... Dr 5,000

To Rent Received a/c 5,000

REPORT
Gateway of Tally  Balance Sheet
Gateway of Tally  Profit and Loss account
Gateway of Tally  Display  Trail Balance

91
Figure 4.1

Figure 4.2

92
 Figure 4.3

EXAMPLE: 5
Record the following transaction that took place during the April to September
2020
Sl. Transactions Item Quantity amount
No.
1 Purchase from Suresh Reynolds Pen 20 200
2 Sales to Vani Parker Pen 125 2400
3 Sales to Ragu Camel Geometry 100 7500
4 Paid money to Suresh in full settlement 190
for the transaction at Ser.No 1 above
5 Received from Vani and Ragu Rs.9,500 cash in
full settlement for their asset transaction at
Ser.No 2 and 3 above.
6 Paid to Manoj 1000
7 Purchase from Hari Parker Pen 15 1600
8 Purchase from Manoj Reynolds pen 18 360

93
 9 Sales to Priya Pilot Pen 100 15000
10 Purchased furniture 2500
11 Paid insurance premium 1560
12 Sold all the investments 25000
13 Paid
1. Outstanding salaries 2000
2. Electricity charges 1000
3. Tax of the last year 23000
14 Out standing
1. Salaries 5000
2. Provision for Tax 24000
Charge depreciation for the period 1.4.2020 to 30.9.2020 on furniture @ 20% p.a
and Machinery @10% p.a.
1. Create a company as per details given above
2. Create appropriate groups and ledgers
3. Enter the transaction as given selecting appropriate voucher type
4. Trail balance as on 30.9.2020
5. Profit and loss account
6. Balance sheet as on 30.9.2020
7. Cash book
SOLUTION:
AIM:
To prepare a Balance Sheet and Profit and Loss account using the adjustments given
Step 1:

Start  Programme  Tally 9  Gateway of Tally Alt F3 Create Company

 (Accounts with inventory)  Save

Step 2: Ledger Creation

Gateway of Tally  F11  Inventory

(i) Integrate accounts and Inventory  Yes

94
 (ii) Allowing Invoice  Yes

(iii) Maintain Stock Categories  Yes

(iv) Maintain Multiple Godowns  Yes

Step 3:

Gateway of Tally  F11  Accounting features  Maintain Bill Wise Details 

Yes

Step 4:

Gateway of Tally  Inventory info  Units of Measure  Create

(i) Type : Simple

(ii) Symbol : Nos

(iii) Formal Name ; Numbers

(iv) Number of Optimal Place: 0

SAVE

Step 5:

Gateway of Tally  Inventory info  Stock Group  Multiple  Create

Sl. No. Name of the Stock Group Under Item and add

1. Office Item Primary Yes

Step 6:

Gateway of Tally  Inventory info  Stock Categories  Single  Create

Sl. No. Name of Categories Under

1. Stationary Primary

Step 7:

95
 Gateway of Tally  Inventory info  Godowns  Multiple Godowns  Create

Sl. No. Name of Godown Under

1. Godown Primary

2. Godown Primary

Step 8:

Gateway of Tally  Inventory info  Stock Item  Multiple  Create

Sl. No. Name of Item Under Categories Units

1. Reynolds Office Stationary Nos

2. Parker Pen Office Stationary Nos

3. Camel Geometry Office Stationary Nos

4. Pilot Pen Office Stationary Nos

Step 9:

Gateway of Tally  Account info  Ledger  Multiple  Create

Sl. No. Name of Ledger Under

1. Purchase Purchase

2. Suresh Sundry Creditors

3. Sales Sales

4. Vani Sundry Debtors

5. Ragu Sundry Debtors

6. Cash Cash

7. Vani & Ragu Sundry Creditors

96
 8. Manoj Sundry Debtors

9. Hari Sundry Creditors

10. Priya Sundry Debtors

11. Furniture Fixed Asset

12. Insurance Premium Indirect Expenses

13. Investment Fixed Asset

14. Outstanding Salaries Indirect Expenses

15. Electricity Charges Indirect Expenses

16. Tax Indirect Expenses

17. Salaries Indirect Expenses

18. Provision for Tax Indirect Expenses

19. Discount Received Indirect Income

20. Depreciation Indirect Expenses

Step 9:

Gateway of Tally  Accounting Vouchers

(i) Purchase (F9)

Parties Name: Suresh

Ledger : Credit Purchase

Sl. No. Name of Item Quantity Amount (Rs.)

1. Reynolds Pen 20 200

(ii) Sales (F8)

Parties Name: Vani

97
 Ledger : Credit Sales

Sl. No. Name of Item Quantity Amount (Rs.)

1. Parker Pen 125 2,400

(ii) Sales (F8)

Parties Name: Ragu

Ledger : Credit Sales

Sl. No. Name of Item Quantity Amount (Rs.)

1. Camel Geometry 100 7,500

(iv) Payment (F5)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Suresh a/c ……………………………. Dr 200

To Cash a/c 190

To Discount a/c 10

(v) Receipts (F6)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Cash a/c ……………………………... Dr 9,500

Discount a/c………………………….. Dr 400

To Vani & Ragu a/c 9,900

98
(vi) Payment (F5)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Manoj a/c ……………………………... Dr 1,000

To Cash a/c 1,000

(vii) Purchase (F9)

Parties Name: Hari

Ledger : Credit Purchase

Sl. No. Name of Item Quantity Amount (Rs.)

1. Parker Pen 15 1,600

(viii) Purchase (F9)

Parties Name: Suresh

Ledger : Credit Purchase

Sl. No. Name of Item Quantity Amount (Rs.)

1. Reynolds Pen 18 360

(ix) Sales (F8)

Parties Name: Priya

Ledger : Credit Sales

Sl. No. Name of Item Quantity Amount (Rs.)

1. Pilot Pen 100 15,000

99
(x) Payment (F5)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Furniture a/c ………………………… Dr 2,500

To Cash a/c 2,500

(xi) Payment (F5)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Insurance Premium a/c ……………… Dr 1,560

To Cash a/c 1,560

(xii) Journal (F7)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Investment a/c ………………………… Dr 25,000

To Sales a/c 25,000

(xiii) Payment (F5)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Outstanding Salary a/c ……………… Dr 2,000

100
 Electricity Charge a/c ………………. Dr 1,000

Tax a/c.……………………………... Dr 23,000

To Cash a/c 26,000

(xiv) Journal (F7)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Salary a/c ………………………… Dr 5,000

To Outstanding Salary a/c 5,000

PARTICULARS DEBIT CREDIT

Rs. Rs.

Provision for Tax a/c ……………… Dr 24,000

To Outstanding Provision a/c 24,000

(xv) Journal (F7)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Furniture a/c ………………………… Dr 500

To Depreciation a/c 500

REPORT
Gateway of Tally  Balance Sheet
Gateway of Tally  Profit and Loss account
Gateway of Tally  Display  Trail Balance
101
Figure 5.1

Figure 5.2

102
 Figure 5.3

EXAMPLE: 6
From the following Trial Balance, prepare Trading, Profit & Loss A/c and a Balance
Sheet as on 31st March, 2015:
TRAIL BALANCE
Particulars Debit Credit
Machinery 14,000
Furniture 200
Opening stock 2,000
Wages 5,000
Purchases 10,500
Return inward 400
Cash at bank 800
Cash in hand 200
Debtors 2,400
Drawings 1,000
Manufacturing expenses 800

103
 Rent 400
Depreciation 420
Sundry expenses 400
Repairs 50
Traveling expenses 100
Bad debts 150
Printing and stationary 50
Carriage 130
Capital 10,000
Sales 26,800
Creditors 1,700
Return outward 500
39000 39000

The value of closing stock was Rs.11,355

SOLUTION:
AIM:
To prepare a Trading and Profit and Loss account and a Balance Sheet
Step 1:

Start  Programme  Tally 9  Gateway of Tally  Alt F3  Create Company

 Save

104
 Figure 6.1

Figure 6.2

Step 2:

Gateway of Tally  Account info  Ledger  Multiple Ledger  Create

105
 Figure 6.3

Figure 6.4

Sl. No. Particulars Under Amount (RS.)

1. Machinery Fixed Asset a/c 14,000 Dr.

106
2. Furniture Fixed Asset a/c 200 Dr.

3. Opening stock Stock in Hand 2,000 Dr.

4. Wages Direct Expenses 5,000 Dr.

5. Purchase Purchase a/c 10,500 Dr.

6. Return Inward Sales a/c 400 Dr.

7. Cash at Bank Bank a/c 800 Dr.

8. Cash Cash in hand 200 Dr.

9. Debtors Sundry Debtors 2,400 Dr.

10. Drawings Sundry Debtors 1,000 Dr.

11. Manufacturing Expenses Indirect Expenses 800 Dr.

12. Rent Indirect Expenses 400 Dr.

13. Depreciation Indirect Expenses 420 Dr.

14. Sundry Expenses Indirect Expenses 400 Dr.

15. Repairs Indirect Expenses 50 Dr.

16. Travelling Expenses Indirect Expenses 100 Dr.

17. Bad Debts Indirect Expenses 150 Dr.

18. Printing and Stationary Indirect Expenses 50 Dr.

19. Carriage Indirect Expenses 130 Dr.

20. Capital Capital a/c 10,000 Cr.

21. Sales Sales 26,800 Cr.

22. Creditors Sundry Creditors 1,700 Cr.

23. Return outwards Purchase 500 Cr.

24. Closing stock Stock in hand 11,355 Dr.

107
 Figure 6.5
Report:
In the Gateway of Tally select Balance Sheet from Reports, Balance Sheet will appear.

Figure 6.6

108
 Figure 6.7
In the Gateway of Tally select Profit & Loss account from Reports, Profit & Loss
account will appear.

Figure 6.8

109
 Figure 6.9
In the Gateway of Tally select Display option from Reports (Figure 6.10)
, the following screen will appear (Figure 6.11), Select Trail Balance (Figure 6.12), from
Display Menu Trail Balance (Figure 6.13) will appear

Figure 6.10

110
Figure 6.11

Figure 6.12

111
 Figure 6.13

EXAMPLE: 7
Bill of Material Purchase the following items from Rishav Stores vide Ref No./Invoice No.
01/19-20
Sl . Particulars Under Rate Qty Amount Godown
No. (Pcs)
1 Perk Raw Materials 7 100 700 Girish Park
2 Dairy Milk Raw Materials 8 100 800 Girish Park
3 Gems Raw Materials 8 100 800 Girish Park
4 Double Shots Raw Materials 8 100 800 Girish Park
5 5Star Raw Materials 6 100 600 Girish Park
After purchase all the items the company has decided to create 50 box finished goods named
“Cadbury Celebration” containing the above items plus cost Rs.2/- per box and
labour charges of Rs.500
Sold 25 boxes of “Cadbury Celebration” @ 15% Profit on cost to Shuvam Stores (Invoice
No.S/001)

SOLUTION:
112
AIM:
To prepare Inventory Book Movement analysis stock group of analysis Cadbury
celebration using the bill of material purchase given.
Step 1:

Start  Programme  Tally 9  Gateway of Tally Alt + F3 Create Company

 (Accounts with inventory)  Save

Figure 7.1

Step 2:

Gateway of Tally  F12  Accounts / Inventory info

(i) Allow Component list details  Yes

(Bill of Materials)

113
 Figure 7.2

Step 3:

Gateway of Tally  Accounts info  Voucher Type  Create

Name : Manufacturing Journal

Type of Voucher : Stock Journal

Method of Voucher Numbering : Automatic

Use as a Manufacturing Journal: Yes

114
 Figure 7.3

Step 4: Stock Group Create

Gateway of Tally  Inventory info  Stock Group  Single  Create

Name : Cadbury Celebration

Under : Primary

Can Quantity of items be Added: Yes

Step 5: Stock item Create

Gateway of Tally  Inventory info  Units of Measure  Create

Type : Simple

Symbol: Pcs

Gateway of Tally  Inventory info  Stock item  Single  Create

Figure 7.4

115
 Figure 7.5

(i) Name : Perk

Under : Cadbury Celebration

Units : Pcs

Alter Components (BoM): Yes

(ii) Name : Dairy Milk

Under : Cadbury Celebration

Units : Pcs

Alter Components (BoM): Yes

(iii) Name : Germs

Under : Cadbury Celebration

Units : Pcs

Alter Components (BoM): Yes

(iv) Name : Double Shots

Under : Cadbury Celebration

Units : Pcs

Alter Components (BoM): Yes

116
 Figure 7.6

(v) Name : 5 Star

Under : Cadbury Celebration

Units : Pcs

Alter Components (BoM): Yes

Step 6:

Gateway of Tally  Inventory info  Stock item  Single  Create

Name : Raw Material

Under : Primary

Units : Pcs

Alter Components (BoM) : Yes

Components of (BoM) : Raw Materials

Name of BoM : Rishav Store

Units of Manufacture :1

117
 Figure 7.7

Sl. No. ITEM QUANTITY

1. Perk 100

2. Dairy Milk 100

3. Gems 100

4. Double Shots 100

5. 5 Star 100

118
 Figure 7.8

Step 7:

Gateway of Tally  Account info  Ledger  Multiple  Create

Sl. No. PARTICULARS UNDER

1. Purchase Purchase

2. Rishav Store Sundry Creditors

3. Labour Charges Indirect Expenses

4. Sales Sales

5. Shuvam Stores Sundry Debtors

119
 Figure 7.9

Step 8:

Gateway of Tally  Accounting Vouchers  F9 Purchase  Ctrl + V

Figure 7. 10

(i) Purchase (F9)

120
 PARTICULARS DEBIT CREDIT

Rs. Rs.

Purchase a/c ………………………... Dr 100

To Rishav a/c 100

(ii) Payment (F5)

PARTICULARS DEBIT CREDIT

Rs. Rs.

Labour charges a/c …………………... Dr 500

To Cash a/c 500

(iii) Receipt (F6)

Figure 7. 11

121
 PARTICULARS DEBIT CREDIT

Rs. Rs.

Cash a/c ………………………... Dr 57.50

To Shuvam a/c 57.50

VOUCHER TYPE

Name : Rishav Stores

Name of Product: Purchase

Quantity :1

Sl. Name of Item Quantity Rate Amount

No. Rs.

1. Perk 100 7 700

2. Dairy Milk 100 8 800

3. Gems 100 8 800

4. Double Shots 100 8 800

5. 5 Star 100 6 600

500 3,700

Report:

Gateway of Tally  Display  Inventory Books  Movement Analysis 

Stock Group Analysis  Cadbury Celebration  2 Time press the Enter button

122
 Figure 7.12

EXAMPLE: 8

Create the following stock particulars for Vimal Distribution

Stock Item Stock Group Sub stock Units of Opening Unit Price
Group Measures Quantity
Bourbon Biscuits Cream Biscuits Packet of 10 500 Pcs 10/pkt
Pieces
Horlicks Biscuits Plain Biscuits Packet of 10 1000 pkts 15/pkt
Pieces
Lacto king Chocolates Candy Packet of 50 250 pkts 1/pce
Pieces
Five star Chocolates Bar Box of 100 50 Boxes 10/piece
Pieces
Lays Snacks Potato chips Box of 100 150 pkts 10/pkt
pieces
Sunfest Biscuits Plain biscuits Packet of 10 100 pkts 12/pkt
pieces
Bournvita Biscuits Plain biscuits Packet of 10 800 pkts 20/pkt
pieces
Alphenliebe Chocolates Candy Packet of 50 100 pkts 1/pce
Pieces
Dairy Milk Chocolates Bar Box of 100 250 Boxes 10/piece
Pieces
123
 Bingo Snacks Potato chips Box of 100 300 boxes 15/pkt
packets

SOLUTION:

Step 1:

Start  Programme  Tally 9  Gateway of Tally Alt + F3/F1 Create

Company  (Accounts with inventory)  Save

Step 2:

Gateway of Tally  F2  Inventory features

(ii) Integrate Accounts and Inventory  Yes

(iii) Allowing Invoice  Yes

(iv) Maintain Stock Categories  Yes

(v) Maintain Multiple Godowns  Yes

Step 3:

Gateway of Tally  F11  Accounting Features Maintain Bill wise Details 

Yes

Step 4:

Gateway of Tally  Inventory info  Units of Measure  Create

(i) Type : Simple

Symbol : Pcs

Formal Name :

Number of Decimal Place : 0

(ii) Type : Simple

Symbol : Pckts

Formal Name :

124
 Number of Decimal Place : 0

(iii) Type : Simple

Symbol : Box

Formal Name :

Number of Decimal Place : 0

Step 5:

Gateway of Tally  Inventory info  Stock Group  Multiple  Create

Sl. SUBSTOCK GROUP UNDER ITEM AND ADD

No.

1. Cream Biscuits Primary Yes

2. Plain Biscuits Primary Yes

3. Candy Primary Yes

4. Bar Primary Yes

5. Potato Chips Primary Yes

6. Plain Biscuits Primary Yes

7. Plain Biscuits Primary Yes

8. Candy Primary Yes

9. Bar Primary Yes

10. Potato Chips Primary Yes

Step 6:

Gateway of Tally  Inventory Info  Godowns Multiple Godown  Create

SL. No. Name of Godown Under

125
 1. First Floor Primary

2. Second Floor Primary

Step 6:

Gateway of Tally  Inventory Info  Stock Item Multiple  Create

Sl. Name of Under Categories Unit Opening Rate Amt

No. Item (RS.) (RS.)

1. Bourbon Cream Biscuits Not Applicable Packet 500 10 5,000

2. Horlicks Plain Biscuits Not Applicable Packet 1000 15 15,000

3. Lacto king Candy Not Applicable Packet 250 1 250

4. Five Star Bar Not Applicable Box 50 10 500

5. Lays Potato chips Not Applicable Box 150 10 1,500

6. Sunfest Plain biscuits Not Applicable Packet 100 12 1,200

7. Bournvita Plain biscuits Not Applicable Packet 800 20 16,000

8. Alphenliebe Candy Not Applicable Packet 100 1 100

9. Dairy Milk Bar Not Applicable Box 250 10 2,500

10. Bingo Potato chips Not Applicable Box 300 15 4,500

Report:

(i) Gateway of Tally  Stock Summary

126
 Figure 8.1

(ii) Gateway of Tally  Display  Statement of Inventory Categories 

Primary

Figure 8.2

(iii) Gateway of Tally  Profit and Loss account

127
 Figure 8.3

EXAMPLE: 9
On 1st October 2017 purchase raw material in cash for manufacture of pressure cooker voice
GST-0111
Sl. No. Item name Qty Rate GST rate
1 Handel set 100 pcs 50 28%
2 Rubber gasket 100 pcs 3.10 28%
3 Aluminium circle sheet 100 kg 190 18%
4 Safety valve 100 pcs 25 18%
5 Weight set 100 pcs 50 18%
6 Vent tube 100 pcs 53 18%
7 Pressure cooker manual 100 pcs 5 12%
8 Pressure cooker box 100 pcs 11 12%

Pass the necessary entry

SOLUTION:
Step 1:

Start  Programme  Tally 9  Gateway of Tally Alt F3 Create Company

128
 Save

Step 2:

Gateway of Tally  F11  Inventory Features

(i) Integrate accounts and Inventory  Yes

(ii) Allowing Invoice  Yes

(iii) Maintain Stock Categories  Yes

(iv) Maintain Multiple Godowns  Yes

Step 3:

Gateway of Tally  F11  Accounting features  Maintain Bill Wise Details 

Yes

Step 4:

Gateway of Tally Account info  Ledgers  Multiple  Create

(i) XY & Co  Sundry Creditors

(ii) AB & Co  Sundry Creditors

(iii) NM & Co  Sundry Creditors

(iv) Purchases  Purchases

(v) GST  Taxes

Step 5:

Gateway of Tally  Inventory info  Units of Measure  Create

(i) Type : Simple

Symbol : Nos

Formal Name : Pcs

Number of Decimal Place : 0

(ii) Type : Simple

129
 Symbol : No

Formal Name : Kg

Number of Decimal Place : 0

Step 6:

Gateway of Tally  Inventory info  Stock Group  Multiple  Create

Sl. No. Name of the Stock Group Under Item and add

1. Pressure Cooker Primary Yes

Step 7:

Gateway of Tally  Inventory info  Stock Categories  Single  Create

Sl. No. Name of Categories Under

1. Manufacture Primary

Step 8:

Gateway of Tally  Inventory info  Stock Item  Multiple  Create

Sl. No. Name of Item Under Categories Unit

1. Handel set Primary Manufacture Pcs

2. Rubber gasket Primary Manufacture Pcs

3. Aluminium circle sheet Primary Manufacture Kg

4. Safety valve Primary Manufacture Pcs

5. Weight set Primary Manufacture Pcs

6. Vent tube Primary Manufacture Pcs

7. Pressure cooker manual Primary Manufacture Pcs

130
 8. Pressure cooker box Primary Manufacture Pcs

(i) Purchase (F9)

Party Name: XY & Co
Ledger: Credit Purchase

Sl. Name of Item Quantity Rate Amount

No. Rs. Rs.
1. Handel set 100 50 5,000
2. Rubber gasket 100 3.10 310
TOTAL 5,310
Less: GST 28% 1,486.8
3,513.2

(ii) Purchase (F9)

Party Name: AB & Co
Ledger: Credit Purchase

Sl. Name of Item Quantity Rate Amount

No. Rs. Rs.
1. Aluminium circle sheet 100 190 19,000
2. Safety valve 100 25 2,500
3. Weight set 100 50 5,000
4. Vent tube 100 53 5,300
TOTAL 31,800
Less: GST 18% 5,724
26,076

(iii) Purchase (F9)

Party Name: NM & Co
Ledger: Credit Purchase

131
 Sl. No. Name of Item Quantity Rate (Rs.) Amount (Rs.)
1. Pressure cooker manual 100 5 500
2. Pressure cooker box 100 11 1,100
TOTAL 1,600
Less: GST 12% 192
1,408

Report:

(i) Gateway of Tally  Stock Summary

Figure 9.1

(ii) Gateway of Tally  Display  Statement of Inventory Categories

132
 Figure 9.2

(iv) Gateway of Tally  Profit and Loss account

Figure 9.3

133
EXAMPLE:10

Generate salary slip from the following particulars

Date Name Pay Heads Amout Dr/Cr

Rs.
30.04.2020 Thamizhselvan Basic pay 30000 Dr
D.A 15000 Dr
H.R.A 2500 Dr
C.C.A 1500 Dr
Gratuity 2000 Cr
P.F 1000 Cr
30.04.2020 Malar Basic pay 25000 Dr
D.A 9000 Dr
H.R.A 1500 Dr
C.C.A 1000 Dr
Gratuity 1500 Cr
P.F 800 Cr
30.04.2020 Manimaran Basic pay 20000 Dr
D.A 7000 Dr
H.R.A 5000 Dr
C.C.A 3000 Dr
Gratuity 2000 Cr
P.F 3000 Cr
30.04.2020 Palani Basic pay 20000 Dr
D.A 7500 Dr
H.R.A 6000 Dr
C.C.A 3500 Dr
Gratuity 2500 Cr
P.F 4000 Cr

134
SOLUTION:
Step 1: Company Creation

Start  Programme  Tally 9  Gateway of Tally Alt F3 Create Company

(accounts only)  Save

Step 2: Accounting Features

Gateway of Tally  F11  Accounting Features

(i) Maintain Payroll Yes

(ii) More than ONE Payroll / Category  Yes

Step 3:

Gateway of Tally  Payroll info  Units (work)  Create  Save

Type: Simple

Symbol: Days

Step 4: Pay Heads Create

Gateway of Tally  Payroll info  Pay heads Create

(i) Name : Basic Pay

Pay Head Type : Earnings for Employees
Under : Indirect Expenses
Calculation Type : Flat Rate
Calculation Period : Days
(ii) Name : D.A
Pay Head Type : Earnings for Employees
Under : Indirect Expenses
Calculation Type : Flat Rate
Calculation Period : Days
Appears in Pay slip : Yes
Name of Appears in Pay slip: D.A
(iii) Name : H.R.A
Pay Head Type : Earnings for Employees
135
 Under : Indirect Expenses
Calculation Type : Flat Rate
Calculation Period : Days
Appears in Pay slip : Yes
Name of Appears in Pay slip: H.R.A
(iv) Name : C.C.A
Pay Head Type : Earnings for Employees
Under : Indirect Expenses
Calculation Type : Flat Rate
Calculation Period : Days
Appears in Pay slip : Yes
Name of Appears in Pay slip: C.C.A
(v) Name : Gratuity
Pay Head Type : Earnings for Employees
Under : Indirect Expenses
Calculation Type : Flat Rate
Calculation Period : Days
Appears in Pay slip : Yes
Name of Appears in Pay slip: Gratuity
(vi) Name : P.F
Pay Head Type : Earnings for Employees
Under : Indirect Expenses
Calculation Type : Flat Rate
Calculation Period : Days
Appears in Pay slip : Yes
Name of Appears in Pay slip: P.F
Step 5:

Gateway of Tally  Payroll info  Employee Groups  Create

Category: Primary Cost Category

Name : Employees
Under : Primary

136
Step 6:

Gateway of Tally  Payroll info  Employee  Multiple  Create

Under Employee Groups: Employees

S.No Category Employee Name Under
1. Primary Cost Category Tamizhselvan Employee
2. Primary Cost Category Malar Employee
3. Primary Cost Category Manimaran Employee
4. Primary Cost Category Palani Employee

Step 7:

Gateway of Tally  Payroll Vouchers

Payroll Account: Cash

Particulars Amount (RS.)

TAMIZHSELVAN 46,000 Dr.

Basic pay 30,000 Dr.

D.A 15,000 Dr.

H.R.A 2,500 Dr.

C.C.A 1,500 Dr.

Gratuity 2,000 Cr.

P.F 1,000 Cr.

MALAR 34,200 Dr.

Basic pay 25,000 Dr.

D.A 9,000 Dr.

H.R.A 1,500 Dr.

C.C.A 1,000 Dr.

137
 Gratuity 1,500 Cr.

P.F 800 Cr.

MANIMARAN 30,000 Dr.

Basic pay 20,000 Dr.

D.A 7,000 Dr.

H.R.A 5,000 Dr.

C.C.A 3,000 Dr.

Gratuity 2,000 Cr.

P.F 3,000 Cr.

PALANI 30,500 Dr.

Basic pay 20,000 Dr.

D.A 7,500 Dr.

H.R.A 6,000 Dr.

C.C.A 3,500 Dr.

Gratuity 2,500 Cr.

P.F 4,000 Cr.

1,40,700 Dr.

Report:
Gateway of Tally  Display  Payroll Report  Statement of Payroll  Paysheet

138
 Figure 10.1

EXAMPLE: 11
Journal / voucher entry the following transactions in the accounting book of shri Kushal
Cloth Store.
1. Shri kushal cloth store started from Rs. 5 lakh.
2. Opened an account with SBI Bank Dhamtari for Rs. 3 lakhs.
3. Purchased furniture worth Rs 10,000 for the shop.
4. Purchased clothes worth Rs 2 lakh from Shree Cloth Store Raipur and gave
12% GST.
2000 rupees of electricity bill.
5. Gave 100 rupees for tea Nasta.
6. 1500 bill of telephone bill paid by Cheque.
7. Interest of Rs. 1500 was received from SBI Bank.
8. 5000 rupees of rent paid by Cheque.
9. Sold clothes worth Rs. 1 lakh to Shri Trisha Cloth Center Colliery with 12%
GST.
10. The train fare was given 2500 rupees.

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 11. Shree Cloth Store Raipur sent back the clothes of 15000 rupees on receipt of
damage.
12. Office maintenance given 2000 rupees.
13. Withdraw 5000 rupees from SBI Bank for petty cash.
14. Shree Trisha returned from Cloth Center Colliery due to damage of clothes
worth Rs 10 thousand.
15. Bank of Baroda Bank got a Cheque of 90 thousand rupees from Shri Trisha
Cloth Center Colliery.
16. Paid 50 thousand rupees to Mr. Cloth Store Raipur and received 5 percent cash
discount.
17. The clothes worth 2 thousand rupees have deteriorated.
18. Purchased a computer system of Rs. 15000 for the shop.
19. 5000 rupees given for the decoration of the shop.
20. Rs 5000 given for decoration of shop.
Solution –
Before entering Voucher in Tally, we have to create the ledger of all the transactions,
so let’s first create the ledger –
1. Go to the gateway of tally
2. Accounts Info
3. Select Ledger
4. Create

Now the screen of the ledger creation will be displayed in front of you, in which create
all the ledger one by one and yes to the GST while creating the GST Ledger and fill the relevant
information.

Ledger Ledger Under Group

Capital A/c Capital Account

SBI Bank Dhamtari Bank Account

Furniture A/C Fixed Account

Purchase A/c Purchase Account

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Ledger Ledger Under Group

SGST Duties & Taxes

CGST Duties & Taxes

IGST Duties & Taxes

Shri Cloth Store Raipur Sundry Creditor

Electricity Bill A/c Indirect Expenses

Food & Snacks Indirect Expenses

Telephone Bill A/c Indirect Expenses

Bank Interest Received A/c Indirect Income

Rent Indirect Expenses

Trisha Cloth Center Sundry Debtor

Sales Sales

Wages A/c Direct Expenses

Purchase Return A/c Purchase Account

Petty Cash A/c Cash Account

Sales Return Sales

Cash Discount Received A/c Indirect Income

Cloth Damage Indirect Expenses

Computer System A/C Fixed Assets

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Transaction 1
5 lakh rupees Shri Kushal cloth store started.
Voucher entry in Receipt Voucher F6
Capital A / c Dr. 5,00,000
To Cash Cr. 5,00,000
(Shri kushal cloth store started from 5 lakh rupees.)
Transaction 2.
Opened an account with SBI Bank Dhamtari for Rs. 3 lakhs.
Voucher entry in Contra Voucher F4
SBI Bank Dhamtari A / c Dr. 3,00,000
To Cash A / c Cr. 3,00,000
(Account opened in SBI Bank Dhamtari with Rs. 3 Lakh)
Transaction 3.
Purchased furniture of Rs. 10,000 for the shop.
Voucher entry in Payment Voucher
Furniture A / c Dr. 10,000
To Cash A / c cr. 10,000
(Purchased furniture worth Rs 10,000 for the shop.)
Transaction 4.
Purchased clothes worth Rs 2 lakh from Shree Cloth Store Raipur and gave 12%
GST.
Voucher entry in purchase Voucher
Purchase A / c Dr. 2,00,000
CGST A / c Dr. 12,000
SGST A / c Dr. 12,000
To shri cloth store raipur a/c 2,24,000
(Buy clothes worth Rs 2 lakh from Shree Cloth Store Raipur and give 12% GST)
Transaction 5.
2,000 rupees of electricity bill.
Voucher entry in Payment Voucher
Electricity bill A / c Dr. 2,000
To cash ac / c cr. 2,000

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(2,000 rupees of electricity bill.)
Transaction 6.
Gave 100 rupees of chai nasta.
Voucher entry in Payment Voucher
Food & Snacks A / c Dr. 100
To Cash A / c Cr. 100
(Tea Nasta given 100 rupees)
Transaction 7.
1,500 bill of telephone bill paid by check.
Voucher entry in Payment Voucher
Telephne Bill Dr. 1,500
To SBI Bank A / c Cr. 1,500
(1,500 bill of telephone bill paid by check)
Transaction 8.
Interest of Rs. 1,500 was received from SBI Bank.
Voucher entry in Receipt Voucher
SBI Bank A / c Dr. 1,500
To Bank Interest Received a/ c Cr. 1,500
(Interest of Rs. 1,500 received from SBI Bank)
Transaction 9.
5,000 rupees of rent paid by cheque.
Voucher entry in Payment Voucher
Rent a / c Dr. 5,000
To SBI Bank a / c Cr. 5,000
(5,000 rupees of rent paid by cheque)
Transaction 10.
Sold clothes worth Rs. 1 lakh to Shri Trisha Cloth Center Colliery with 12% GST.
Voucher entry in Sales Voucher
Shri Trisha cloth Center 1,12,000
To Sales A / c Cr. 1,00,000
To CGST A / c Cr. 6,000
To SGST A / c Cr. 6,000

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(1 lakh rupees sold to Shri Trisha Cloth Center Colliery with 12% GST)
Transaction 11.
The train fare was given 2,500 rupees
Voucher entry in Payment Voucher
Wages A / c Dr. 2,500
To Cash A / c Cr. 2,500
(2,500 rupees for train fare)
Transaction 12.
Shree Cloth Store Raipur sent back on 15,000 rupees after receiving damage.
Voucher entry in Journal Voucher
Shri Cloth Store Raipur Dr. 15,000
To Purchase Return A / c Cr. 13,800
To CGST A / c Cr. 600
To SGST A / c Cr. 600
(Shree Cloth Store Raipur sent back on receipt of Damage of Rs. 15,000)
Transaction 13.
Office maintenance given 2,000 rupees.
Voucher entry in Payment Voucher
Office Maintenance a / c Dr. 2,000
To Cash a/ c Cr. 2,000
(Office maintenance 2,000 rupees given)
Transaction 14.
Withdraw 5,000 rupees from SBI Bank for petty cash.
Voucher entry in Payment Voucher
Petty Cash A / c Dr. 5,000
To SBI Bank A / c Cr. 5,000
(Withdraw 5,000 rupees for petty cash from SBI bank)
Transaction 15.
Shri Trisha returned from Cloth Center Colliery due to damage of clothes worth Rs.
10 thousand.
Voucher entry in Journal Voucher
Sales Reutrn A / c Dr. 8,800

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CGST A / c Dr. 600
SGST A / c Dr. 600
To Tirsha Cloth Center A / c Cr. 10,000
(Shri Trisha Cloth Center returned from colliery due to damage of clothes worth Rs. 10
thousand)
Transaction 16.
Bank of Baroda bank cheque received from Shri Trisha Cloth Center Colliery for Rs.
90 thousand.
Voucher entry in Receipt Voucher
SBI Bank Dhamtari A / c Dr. 90,000
To Trisha Cloth Center Cr. 90,000
(Cheque of Bank of Baroda Bank got check of Rs. 90 thousand from Shri Trisha Cloth Center
Colliery, Cheque Number 461556.)
Transaction 17.
Paid 50 thousand rupees to Mr. Cloth Store Raipur and received 5 percent cash
discount.
Voucher entry in Payment Voucher
Shri Cloth Store Raipur Dr. 50,000
To Cash Discount Received Cr. 5,000
To Cash A / c Cr. 45,000.
(Paid Rs. 50 thousand to Mr. Cloth Store Raipur and received 5 percent cash discount)
Transaction 18.
2 thousand rupees of clothes went bad.
Voucher entry in Journal Voucher
Cloth Damaged A / c Dr. 2,000
To Purchase A / c Cr. 2,000
(2 thousand rupees of clothes spoiled)
Transaction 19.
Purchased a computer system of Rs. 15,000 for the shop.
Voucher entry in Payment Voucher
Computer System Dr. 15,000
To Cash A / c Cr. 15,000

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(Purchased a computer system of Rs. 15,000 for the shop)
Transaction 20.
Rs 5,000 given for decoration of shop
Voucher entry in Payment Voucher
Office Maintenance A / c Dr. 5,000
To Cash A / c Cr. 5,000
(Office maintenance given Rs. 5,00)

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EXERCISES
1. Enter the following transactions in the voucher entry
1.1.2021 Commenced business with cash Rs.1,80,000
2.1.2021 Deposited into Indian bank Rs.55,000
4.1.2021 Purchases goods for cash Rs.22,000
5.1.2021 Bought goods of Siva Rs.72,000
8.1.2021 Cash sales Rs.16,200
11.1.2021 Cash deposited into Bank Rs.23,000
14.1.2021 Purchased furniture for cash Rs.4,000
16.1.2021 Sold goods to Ram Rs.12,700
17.1.2021 Received cash from Ram Rs.12,446
18.1.2021 Paid Siva Cash Rs.12,000 and Discount allowed by him Rs.240

20.1.2021 Paid Wages Rs.1,800

21.1.2021 Sold goods to Raj Rs.35,000
22.1.2021 Paid cash for trade expenses Rs.150
24.1.2021 Sold goods to Roja Rs. 23,280
2. Enter the following transactions of the company in Tally and show various reports
1. Ashok starts business with Rs. 1,00,000/-
2. Purchase machinery for Rs. 50,000/ and furniture for Rs. 10,000
3. Paid amount for rent Rs. 1,000/
4. Deposits Rs. 10,000/- in Bank
5. Purchase of goods for Rs. 20,000/ from Mr. Ram on credit.
6. Sold goods to Mr. Rakesh for Rs. 10,000/
7. Rs. 5,000/ withdraws from bank for personal use.
8. Withdraws Rs. 1,000/ for office use.
9. Received cash from Mr. Rakesh.
10. Paid to Mr. Ram.
3. Bill of Material
Purchase the following items from Krishna Stores vide Ref No./Invoice No.
02/19-20

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 Sl. Particulars Under Rate Qty Amount Godown
No. (Pcs)
1 Dinner Plate Raw Materials 150 600 90000 Bowbazar
2 Quarter Plate Raw Materials 100 600 60000 Bowbazar
3 Veg Bowl Raw Materials 75 600 45000 Bowbazar
4 Serving bowl Raw Materials 200 200 40000 Bowbazar
5 Oval Platter Raw Materials 350 100 35000 Bowbazar
After purchase all the items the company has decided to create 50 box finished goods named
“Imperial Dinner Set –
21 Pcs” containing the above items in the following manner for each finished goods:
Sl. Particulars Qty
No. (Pcs)
1 Dinner Plate 6
2 Quarter Plate 6
3 Veg Bowl 6
4 Serving bowl 2
5 Oval Platter 1
Additional cost will be added with each set of finished goods Rs. 100 per box and labour charges of
Rs.5000
Sold 25 boxes of “Imperial Dinner Set – 21 Pcs” @ 15% Profit on cost to Keshav Stores (Invoice
No.S/002)

4. The following balance sheet has been prepared from the books of Bright on 1-4-2018.

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During the year the following transactions took place:

a) Wages paid by cash ₹ 2,000

b) Rent paid by cheque ₹ 5,000

c) Cash purchases made for ₹ 3,000

d) Good purchased on credit from Senthamarai ₹ 15,000

e) Goods sold on credit to Pushparaj ₹ 25,000

f) Payment made to Senthamarai by cheque ₹ 5,000

g) Cash received from Shankar ₹ 30,000

h) Cash sales made for ₹ 6,000

i) Depreciate machinery at 10%

j) Closing stock on 31.03.2019 ₹ 15,000

You are required to prepare trading and profit and loss account for the year ended 31-03-2019
and a balance sheet as on that date using Tally.

5. On 01-07-2017 I Tech LTD Purchase some goods for office use from Great shop (Harsh
vihar , Delhi) and charged IGST (invoice no-GST01)
Sl. Particular Qty Rate Amount Dis. GST
No.
1. Phool Bhari Jhadoo 8 pcs 60 480 10% 0%
2. Tea 5 kg 55 275 10% 5%
3. Umbrella 10 pcs 60 600 10% 12%
4. Soap 20 pcs 25 500 10% 18%
5. Fridge 1pcs 11,500 11,500 20% 28%

Pass the entry in the books of I Tech LTD. GSTIN is (07DQTCK9758M1ZG)

6. On 01-01-2018 purchased 500 nos office file @Rs.30 each from the Stationery House with

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the invoice no-GST/05/2017-18 and paid GST@12%, GST
On 02-01-2018 purchased 100 pcs of stapler @ Rs.20 each from stationery House with the
invoice no-GST/09/2017-18 and paid GST@18%
On 05-01-2018 purchased 200 nos of Markers @ Rs.35 each from stationery House with the
invoice no-GST/352/2017-18 and paid GST@18%.
Pass the necessary Entry.

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MODEL QUESTIONS

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